Citation

Bhargava S, Pathania V. Am. Econ. Assoc. Annu. Meet. Pap. 2011; 2011(pdfid 182): 1-61.

Affiliation

University of Chicago; London School of Economics

Copyright

(Copyright © 2011, American Economic Association)

DOI

unavailable

PMID

unavailable

Abstract

Previous research in the laboratory and by epidemiologists has compared the danger of cell phone use while driving to that of illicit levels of alcohol. This paper investigates the causal link between driver cell phone use and crash rates by exploiting a natural experiment -- the discontinuity in marginal pricing at 9pm on weekdays from 2002 to 2005 when cellular plans transitioned from "peak" to "off-peak" pricing. We first documented that the pricing threshold induced a 7.2% jump on Mondays to Thursdays in call likelihood for a large and proprietary sample of drivers in California from 2005. Two additional datasets of calls, drawn from drivers and non-drivers nationwide, affirm the price sensitivity of cell phone users. We next document the corresponding change in the crash rate for California as well as the eight additional states for which we have the universe of crash data. Using a period prior to the prevalence of 9pm plans as a comparison group, we found no evidence for a relative rise in crashes after 9pm on Mondays to Thursdays in 2005, or during an extended period from 2002 to 2005. These results are robust to alternative estimation strategies and controls. Our preferred estimates imply an upper bound in the odds ratio of crash risk associated with cell phone use of 3.0, which rejects the findings of most existing research including the 4.3 asserted in the influential paper by Redelmeier and Tibshirani (1997). A panel analysis of regional trends in cell phone ownership and legislation banning driver cell phone use confirms our basic result. We present possible explanations for this counterintuitive finding, and discuss implications for policy.