Motor Carrier Deregulation and Highway Safety: An Empirical Analysis

Abstract

The passage of the Motor Carrier Reform and Modernization Act of 1980 (MCA 1980) effectively marked the end of rate and entry regulation in the interstate trucking industry, and most economists agree that this legislation has created many important economic benefits during the 1980s. For example, shipping rates fell in real terms, service expanded and improved in quality, and generally resources were used more efficiently.' There is increasing concern, however, that deregulation has led firms to reduce safety expenditures in order to remain competitive, and that trucking accidents and fatalities have increased as a consequence [4; 9]. Indeed, Brock Adams (former U.S. Secretary of Transportation) claims that trucking accidents have increased since 1980 for this very reason.2 The limited empirical evidence reported in the literature suggests otherwise. Moore [17], for example, shows that accident, fatality, and injury rates have fallen since 1980 despite the rapid increase in the number of truck-miles traveled [13]. His analysis, however, is based on a comparison of rates across time, and does not reveal any of the potential economic or institutional forces that may be affecting the evolution of these data. In a more systematic analysis, Traynor [22] finds that deregulation has reduced accident rates in California, although it may be difficult to extend his results to the national experience as a whole. This paper has two major objectives. The first is to estimate an empirical model using a pooled, cross section of state data to determine whether the evidence Traynor [22] reports for California holds, in general, for all other states. The second objective is to determine empirically those factors that may be driving the results in Moore [17]. Pooling these data allow us to test