The Impact of Airbag Adoption on Relative Personal Injury and Absolute Collision Insurance Claims

Abstract

This article examines the impact of airbag adoption on the relative injury and absolute collision loss data experiences of automotive vehicle lines. The data set consists of every automobile model for which overall injury data was published by the Highway Loss Data Institute (HLDI) for the 1989–1991 model years. The empirical analysis in the article indicates that both relative injury and absolute collision losses are never mitigated and usually worsen significantly for airbag-equipped cars relative to belt-only equipped models after airbag adoption. These results are consistent both with the Peltzman hypothesis of driver behavioral changes and at-risk consumers' shifting preference for airbag-equipped models.