We are indebted to the Douglas Chair Fund at Colby College for financial assistance and to seminar participants at Colby and an anonymous referee for very helpful comments that substantially improved the final paper.
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STRICT PRODUCT LIABILITY AND SAFETY: EVIDENCE FROM THE GENERAL AVIATION MARKET
Article first published online: 17 OCT 2007
DOI: 10.1111/j.1465-7295.2007.00098.x
© 2007 Western Economic Association International
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How to Cite
NELSON, R. A. and DREWS, J. N. (2008), STRICT PRODUCT LIABILITY AND SAFETY: EVIDENCE FROM THE GENERAL AVIATION MARKET. Economic Inquiry, 46: 425–437. doi: 10.1111/j.1465-7295.2007.00098.x
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We are indebted to the Douglas Chair Fund at Colby College for financial assistance and to seminar participants at Colby and an anonymous referee for very helpful comments that substantially improved the final paper.
Publication History
- Issue published online: 2 SEP 2008
- Article first published online: 17 OCT 2007
- Online Early publication October 17, 2007
- Abstract
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This paper examines the impact of a strict product liability standard on the accident rate in the general aviation (GA) industry. Liability expenses increased by 775% between 1976 and 1986, reducing the sales of new GA aircraft by 90% and increasing the age of the GA fleet. Using both aggregate and model-specific data, our results indicate that the increase in the age of the GA fleet increased the accident rate by 25%–35% during 1981–2000. In addition, the higher price of GA aircraft boosted sales of homebuilt planes, which have higher accident and fatality rates than GA aircraft. (JEL K13, L62, L15)