Citation

Goldstein JP. J. Risk Insur. 1996; 63(2): 313-322.

Copyright

(Copyright © 1996, American Risk and Insurance Association, Publisher John Wiley and Sons)

DOI

10.2307/253747

PMID

unavailable

Abstract

This article develops the economic implications of a head-neck injury tradeoff that underlies the technological limitations of motorcycle helmets as a form of self-insurance. Conditional on this tradeoff, an analysis of the optimal self-insurance decision establishes that mandatory helmet use legislation results in expected welfare losses for a subset of the motorcycling population. These losses are not compensated by other forms of self-insurance expenditures because such expenditures are suboptimal. In the case of increased risk aversion, the model generates standard results for loss reduction activities with known productivities.