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Using a unique dataset, this paper empirically tests the Peltzman effect by investigating the behavior of Formula One racecar drivers.  Estimates suggest that drivers become more reckless as their cars become safer, ceteris paribus.  From 1963-1973, safety changes, on average, are estimated to leave the number of driver casualties unchanged. Furthermore, this is the first attempt to estimate specifically how drivers respond to changes in the conditional probability of fatality given an accident.  Results provide evidence that the behavioral response of drivers is larger when the analysis is confined to changes in the conditional probability of a fatality given an accident.

Estimating the Offsetting Effects of Driver Behavior in Response to Safety Regulation: The Case of Formula One Racing