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Abstract
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Cellular phone subscribership in the United States has grown dramatically in recent years, from 92,000 people in 1985 to more than 77,000,000 in 1999. Cellular phones in cars provide important conveniences, including the ability to check on children, get help in an emergency, and coordinate schedules. In addition, drivers sometimes use cellular phones to report accidents and alert police and firefighters to problems that need to be addressed.
Unfortunately, cellular phones can also impose costs on society. One of the potentially significant costs of cellular phone usage while driving is the increased risk of vehicle accidents, some leading to serious injury or death. We estimate that several hundred people die each year in the United States as a consequence of collisions related to cellular phone use. While small in comparison to the 41,000 people who die in all vehicle accidents each year in the United States, municipalities, states, and even some countries have proposed a large array of restrictions on the use of cellular phones. Although only a few American municipalities have implemented a ban on people’s use of hand-held cellular phones while driving, several foreign countries have enacted laws, including limited and total bans.
In this article we provide an economic evaluation of cellular phone regulatory options. Our primary conclusion is that banning cellular phone usage by drivers is a bad idea. A ban in the United States is estimated to result in annual economic welfare losses of about $20 billion. |