Automobile Safety Inspections and Enforcing Norms: Case Study of Japan Using Panel Data

This paper explores, using panel data of Japan, whether automobile inspections help to reduce accidents. Two innovations introduced by this paper are the control of endogeneity by the 2sls fixed effects model and the taking into account of norm enforcement in order to control the omitted variable bias. We found through this estimation that automobile inspections and the enforcing of social norms play a critical role in reducing fatalities but not non-fatal accidents.