The Odd Case of Liability and Small Airplanes

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Back in 1994, Congress passed the General Aviation Revitalization Act. Under this law, small airplane manufacturers were no longer liable for accidents in planes more than 18 years old. So how did that affect the behavior of pilots? Alex Tabarrok has a new paper out that looks into this:

Our estimates show that the end of manufacturers’ liability for aircraft was associated with a significant (on the order of 13.6 percent) reduction in the probability of an accident. The evidence suggests that modest decreases in the amount and nature of flying were largely responsible. After GARA, for example, aircraft owners and pilots retired older aircraft, took fewer night flights, and invested more in a variety of safety procedures and precautions, such as wearing seat belts and filing flight plans. Minor and major accidents not involving mechanical failure—those more likely to be under the control of the pilot—declined notably.After GARA, for example, aircraft owners and pilots retired older aircraft, took fewer night flights, and invested more in a variety of safety procedures and precautions, such as wearing seat belts and filing flight plans. Minor and major accidents not involving mechanical failure—those more likely to be under the control of the pilot—declined notably.

I don’t know anything about this, and I’m not qualified to judge the paper. But if it’s correct, it sure does suggest a counterintuitive view of human nature. At one level, the obvious response is: Hey, incentives matter! Make pilots responsible for their own behavior, and they become more careful. What’s so counterintuitive about that? But at a deeper level, think about what this implies. We’re supposed to believe that once the ability to sue over an (extremely unlikely) accident was taken away, pilots actively decided to fly less, wear seat belts more, and replace their old equipment. Really? The prospect of dying didn’t do the trick, but the prospect of not being able to sue did? This really doesn’t fit my mental model of human behavior. That’s especially true given this comment from Alistair Cunningham:

If you look back at the lawsuits that did take place, they were rarely pilots suing, they were the families of deceased pilots egged on by what almost every pilot I’ve ever met would consider as parasitic lawyers. They tended to be awarded large payouts by sympathetic juries who saw only a poor grieving family and a rich distant corporation, and who didn’t understand that the overwhelming majority of general aviation accidents are the pilot’s fault.

If that’s the case, then liability would be expected to have no effect at all on pilots themselves.

I’m not really trying to take sides here. Like I said, I’m not qualified to judge the paper (which I haven’t read). But I would say that if this conclusion holds up, we should see similar behavior in lots of other areas, with legislative changes that affect remote consequences having significant and measurable effects on immediate behavior. Do we?

HERE ARE THE FACTS:

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