Table A1. Subjective probabilities and expected premium increases due to reckless driving
Std.
Mean
dev.
Speeding
Subjective prob. of speeding 15mph+
0.45
0.40
Subjective prob. of speeding 15mph+ (2)
0.40
0.39
Subjective prob. of being pulled over | Speeding 15mph+
0.24
0.25
Subjective prob. of being pulled over | Speeding 15mph+ (2)
0.24
0.23
Subjective prob. of speeding conviction | Speeding 15mph+
0.51
0.37
Subjective prob. of speeding conviction | Speeding 15mph+ (2)
0.50
0.36
Expected premium increase | Speeding 15mph+ conviction
0.28
0.28
Expected premium increase | Speeding 15mph+ conviction (2)
0.33
0.34
Subjective prob. of drinking and driving
0.17
0.30
Subjective prob. of drinking and driving (2)
0.17
0.30
Subjective prob. of being pulled over | Drinking and driving*
0.10
0.13
Subjective prob. of being pulled over | Drinking and driving* (2)
0.11
0.14
Subjective prob. of DWI conviction | Pulled over for drinking and driving*
0.60
0.33
Subjective prob. of DWI conviction | Pulled over for drinking and driving* (2)
0.61
0.32
Expected premium increase | DWI conviction
0.77
1.17
Expected premium increase | DWI conviction (2)
0.85
0.93
Drinking and driving
N
Excludes individuals without liability insurance
(2) indicates a question elicited in Wave 2; otherwise, Wave 1
* This question relates specifically to weekend drinking and driving.
1,136
Table A2. Relationship between subjective probability of reckless driving and premium increase
Subjective prob. of speeding 15mph+
Mean
(std. dev.)
(1)
Subjective prob. of Speeding
15mph+
Subjective prob. of Drinking and
driving
Expected premium increase |
Speeding 15mph+
Expected premium increase |
Drinking and driving
Random pair
(2)
Random pair
(bootstrap)
(3)
All
responses
(4)
-0.332 ***
(0.110)
-0.279 ***
(0.108)
-0.236 ***
(0.071)
Subjective prob. of drinking and driving
Random pair
(5)
Random pair
(bootstrap)
(6)
All responses
(7)
0.394 ***
(0.395)
0.119 ***
(0.263)
0.053 ***
(0.132)
0.077 ***
(0.197)
4,331
-0.089 ***
(0.024)
2,299
0.014
-0.104 ***
(0.028)
2,242
-0.101 ***
(0.021)
4,488
0.012
N
2,134
2,148
6,444
R-squared
0.010
0.007
Notes:
Standard errors in parentheses
Excludes individuals without liability insurance
Expected premium increase | Speeding 15mph+ = E[Premium increase|Speeding Conviction]*P(Speeding Conviction|Pulled Over)*Prob(Pulled
Over|Speeding 15mph+)
Expected premium increase | Drinking & Driving = E[Premium increase|DWI Conviction]*P(DWI Conviction|Pulled Over)*P(Pulled Over|Weekend
Drinking & Driving)
Regressions include individual and wave fixed effects.
* p<0.10 ** p<0.05 *** p<0.01
Table A3. Moral hazard steps 2 and 3
Subjective prob. of drinking and driving
Drove after
drinking in
past year
(Wave 2)
(1)
0.693 ***
(0.036)
Subjective prob. of speeding
Any
accident in
past year
(Wave 2)
(2)
0.046 **
(0.021)
Drove after drinking in past year (Wave 2)
Wave 1
N
1,164
Notes: Regression in col. 3 includes individual fixed effects.
* p<0.10 ** p<0.05 *** p<0.01
Any accident
(pooled)
(3)
1,169
0.048 ***
(0.015)
0.121 ***
(0.014)
2,351