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.

Economy-wide Estimates of Rebound Effects: Evidence from Panel Data

Energy consumption and greenhouse emissions across many countries have increased overtime despite widespread energy efficiency improvements. One explanation offered in the literature is the rebound effect (RE), however there is a debate about the magnitude and appropriate model for estimating RE. Using a combined stochastic frontier analysis and two-stage dynamic panel data approach for 55 countries covering 1980-2010, we explore these two issues of magnitude and model. Our central estimates indicate that, in the short-run, 100% energy efficiency improvement is followed by 90% rebound in energy consumption, but in the long-run it leads to a 36% decrease in energy consumption. Overall, our estimated cross-country RE magnitudes indicate the need to consider or account for RE when energy forecasts and policy measures are derived from potential energy efficiency savings

Managing water scarcity at a river basin scale with economic instruments

This paper presents a conceptual framework for both assessing the role of economic instruments, and reshaping them in order to enhance their contribution to the goals of managing water scarcity. Water management problems stem from the mismatch between a multitude of individual decisions, on the one hand, and the current and projected status of water resources on the other. Economics can provide valuable incentives that drive individual decisions, and can design efficient instruments to address water governance problems in a context of conflicting interests and relevant transaction costs. Yet, instruments such as water pricing or trading are mostly based on general principles of welfare economics that are not readily applicable to assets as complex as water. A flaw in welfare economic approaches lies in the presumption that economic instruments may be good orbad on their own (e.g., finding the "right" price). This vision changes radically when we focus on the problem, instead of the instrument. In this paper, we examine how economic instruments to achieve welfare-enhancing water resource outcomes can realize their full potential in basin-scale management contexts. We follow a political economy perspective that views conflicts between public and private interest as the main instrumental challenge of water management. Our analysis allows us to better understand the critical importance of economic instruments for reconciling individual actions towards collective ambitions of water efficiency, equity and sustainability with lessons for later-adopting jurisdictions. Rather than providing panaceas, the successful design and implementation of economic instruments as key river basin management arrangements involves high transaction costs, wide institutional changes and collective action at different levels

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

Rethinking economy-wide rebound measures : an unbiased proposal

In spite of having been first introduced in the last half of the ninetieth century, the debate about the possible rebound effects from energy efficiency improvements is still an open question in the economic literature. This paper contributes to the existing research on this issue proposing an unbiased measure for economy-wide rebound effects. The novelty of this economy-wide rebound measure stems from the fact that not only actual energy savings but also potential energy savings are quantified under general equilibrium conditions. Our findings indicate that the use of engineering savings instead of general equilibrium potential savings downward biases economy-wide rebound effects and upward-biases backfire effects. The discrepancies between the traditional indicator and our proposed measure are analysed in the context of the Spanish economy