What We Know About Uninsured Motorists and How Well We Know What We Know

The problem posed by the uninsured motorist is of concern to the general public, policyholders, insurance companies, insurance regulators, and legislators. What is striking, however, is the fragmentary nature of the information that is available and the fact that it is scattered over so many sources. Even more striking is the fact that those sources often provide conflicting estimates, and the methods used in deriving those estimates are either never spelled out or, if they are, their reliability is unknown. In view of the general concern with the problem of uninsured motorists, this paper attempts to present an overview of what we know about the uninsured motorists and how well we know what we know through the following measures: clarifying the subtleties of the definition of an uninsured motorist; discussing the more prominent methods used to estimate the number of uninsured motorists and the properties of the estimates generated by these methods; illustrating what is known about the profiles of uninsured motorists; and pointing briefly to factors that account for the existence of uninsured motorists.

Pay-at-the-Pump Auto Insurance

PAY-AT-THE-PUMP is a proposal to replace the current insurance system of lump sum payments for automobile insurance by a mechanism whereby motorists pay for their insurance as they buy fuel for their vehicles. PAY-AT-THE-PUMP has several advantages. It reduces insurance cost and cross subsidies and enhances equity. It also benefits the environment, safety, balance of payments, and security. In this paper we study limited but very important issues in the theory and implementation of PAY-AT-THE-PUMP insurance. We address issues of efficiency, subsidy, equity, externalities, safety, insurance cost and cost of insuring the uninsured motorist under a PAY-AT-THE-PUMP regime. We use the insurance industry’s criticisms of mandatory auto insurance as a lens through which we view PAY-AT-THE-PUMP insurance and ask how PAY-AT-THE-PUMP fares by comparison. Finally we address one aspect of insurance that has been neglected in the current debate -- the human dimension of the problem of uninsured motorist and the contribution PAY-AT-THE-PUMP can make to solve this problem.

Pay-at-the-Pump (PATP) Auto Insurance: Criticisms and Proposed Modifications

In 1998 the U.S. Environmental Protection Agency sponsored an effort to examine the criticisms and concerns expressed about Pay-at-the-Pump (PATP) auto insurance and explore the reformulation of PATP, taking into account these concerns. This paper provides a brief exposition of PATP and its main advantages followed by a review of its criticisms and concerns. We outline a reconstituted PATP proposal emerging from the review of these criticisms: a hybrid system that merges the best features from PATP and the existing insurance system. It retains what is consistent with the free market operation and market incentive in the existing system. At the same time it restores the price signal, the sine qua non for economic efficiency, where it has been extinguished in the existing insurance system. The reconstituted proposal capitalizes on the pricing efficiency feature that characterizes PATP, which in turn leads to a reduction in insurance cost, enhanced safety, elimination of resource misallocation, enhanced equity and reduction (possibly elimination) of accident-cost externalities. In addition, it benefits society at large with improved environment, improved balance of payments, enhanced U.S. security, and a redress to the human dimension of the uninsured motorist problem.

Beyond energy efficiency in evaluating sustainable development in planning and the built environment

The EU has set the policy target of reducing energy use by 20% by the year 2020. Therefore, a substantial consumption decrease is needed in the built environment sector. Despite the great energy efficiency improvements in households, recent energy consumption data analyses show that these targets will unlikely be reached. The general aim of this study is to point out the need to define new indicators and evaluation approaches in urban planning and the built environment which are based on the concept of ‘energy subsidiarity', focusing on local renewable resources rather than on current approaches based on energy efficiency. This concept correlates energy consumption with the energy supply from local renewable resources and is here proposed as the new urban planning evaluation approach toward a sustainable built environment. In the paper, the ‘Jevons Paradox' concept and the ‘energy rebound effect' phenomenon are used to demonstrate how current approaches based on energy efficiency, alone, cannot lead to a remarkable reduction of energy consumption. This is also supported by data on European energy consumption and European energy efficiency in the built environment. Finally, a number of well-known European ecological districts (‘eco-districts') are analysed in terms of sustainable energy strategy as well as energy efficiency and energy balance. This study shows that there is a contradiction between the purpose of some of the eco-districts to be low consumption (or low impacts), and the district renewable energy balance. Only a few of the analysed eco-districts are able to cover energy needs by using renewable energy obtained in the surrounding area. In most of the cases, the focus of the districts' activities is on energy efficiency. According to the ‘Jevons Paradox' and ‘energy rebound effect' paradigm, energy efficiency alone will unlikely lead to an effective reduction in resources' consumption. These results point out the need for a radical shift toward the development of new approaches in the assessment and management of the built environment for sustainabilit

Liberalizing trade in environmental goods and services

We examine the effects of trade liberalization in environmental goods in a model with one domestic downstream polluting firm and two upstream firms (one domestic, one foreign). The upstream firms offer their technologies to the downstream firm at a flat fee. The domestic government sets the emission tax rate after the outcome of R&D is known. The effect of liberalization on the domestic upstream firm's R&D incentive is ambiguous. Liberalization usually results in cleaner production, which allows the country to reach higher welfare. However this increase in welfare is typically achieved at the expense of the environment (a backfire effect)

Energy conservation more effective with rebound policy

This article sketches the problem of indirect energy use effects, also known as rebound, of energy conservation. There is widespread support for energy conservation, especially when it is voluntary, as this seems a cheap way to realize environmental and energy-climate goals. However, this overlooks the phenomenon of rebound. The topic of energy rebound has mainly attracted attention from energy analysts, but has been surprisingly neglected in environmental economics, even though economists generally are concerned with indirect or economy-wide impacts of technical change and policies. This paper presents definitions and interpretations of energy and environmental rebound, as well as four fundamental reasons for the existence of the rebound phenomenon. It further offers the most complete list of rebound pathways or mechanisms available in the literature. In addition, it discusses empirical estimates of rebound and addresses the implications of uncertainties and difficulties in assessing rebound. Suggestions are offered for strategies and public policies to contain rebound. It is advised that rebound evaluation is an essential part of environmental policy and project assessments. As opposed to earlier studies, this paper stresses the relevance of the distinction between energy conservation resulting from autonomous demand changes and from efficiency improvements in technology/equipment. In addition, it argues that rebound is especially relevant for developing countries. © 2010 The Author(s)