The Impact of No-Fault Legislation on Automobile Insurance

Abstract

Since its inception, the effectiveness of no-fault legislation has been highly debated. Although some research suggests that no-fault laws are effective in reducing costs, other evidence suggests that the current no-fault systems may not meet the original objectives. This study provides a detailed assessment of the relation of no-fault laws and automobile insurance losses for the period 1994 to 2007. By examining total automobile insurance losses along with liability and personal injury protection losses, we are able to determine if and how specific provisions of the laws are related to claims costs. We find a negative relation between the presence of a no-fault law and total losses, which suggests that no-fault systems are associated with lower losses than the traditional tort system. In addition, an examination of no-fault-only states suggests that specific provisions of no-fault laws, such as thresholds and limitations on benefits, have some effect on losses. With the sunset of Colorado’s no-fault legislation in 2003, the recent passage of Personal Injury Protection Reform in Florida, and proposed federal choice legislation, the overall impact of no-fault as well as the specific components of the laws are of heightened importance to consumers, insurers, and lawmakers.     

Innovation,external technical linkages and small firm commercial performance: an empirical analysis from Western New York

This paper examines the role of external service linkages in the innovation and market peformance of small manufacturing firms (SMFs). Survey data from a technological cross-section of 146 Western New York SMFs are summarized. The data suggest a helpful role for consultants in the product development efforts of innovative firms, especially those that serve foreign export markets. Several multiple discriminant models are presented, each of which suggests an interactive connection between SMF commercial performance, externa) technical links, innovation propensity and in-house R&D. It is argued that innovative SMFs that exploit specialized technical services perform significantly better than comparably sized firms that rely solely on in-house resources. It is also argued that the quality of a region's producer service environment may have a significant bearing on the growth potential of its SMF population. The paper concludes by discussing the main academic and public policy implications that flow from the empirical results.     

The Wage and Employment Dynamics of Minimum Wage Workers

This study uses panel data to examine the wage and employment dynamics of minimum wage workers. Compared with workers earning above the minimum, minimum wage workers are much more likely to be new entrants or to exit the labor market. Changes in industry, occupation, and access to job training are particularly important to improving the wages of minimum wage workers. Many minimum wage workers earn less than their potential wage temporarily because of nonwork circumstances that make higher-paying jobs less attractive.     

Life course pathways to business start-up

We explore how socially embedded life courses of individuals within Britain affect the resources they have available and their capacity to apply those resources to start-up. We propose that there will be common pathways to entrepreneurship from privileged resource ownership and test our propositions by modelling a specific life course framework, based on class and gender. We operationalize our model employing 18 waves of the British Household Panel Survey and event history random effect logistic regression modelling. Our hypotheses receive broad support. Business start-up in Britain is primarily made from privileged class backgrounds that enable resource acquisition and are a means of reproducing or defending prosperity. The poor avoid entrepreneurship except when low household income threatens further downward mobility and entrepreneurship is a more attractive option. We find that gendered childcare responsibilities disrupt class-based pathways to entrepreneurship. We interpret the implications of this study for understanding entrepreneurship and society and suggest research directions.     

Racial differences in married female labor force participation behavior: An analysis using interracial marriages

Based on data from the 1980 census, three major findings emerge from this study. First, the labor force participation rate is higher for women in black-white interracial marriages than women in endogamous marriages. Second, the labor force participation rate of wives in interracial marriages, after adjusting for differences in observed personal characteristics, is approximately halfway between that of women in white homogeneous and black homogeneous marriages. Third, interracial marriages are more likely among women who are younger, Hispanic, foreign-born, more educated, previously married, and reside in the West.     

Book reviews

MARKETING BUDGETING by Nigel Piercy (Croom Helm, 1986) 522 pages, £27.50 hb. ISBN 0–7099–2092‐X.

STATISTICS FOR MARKETING by Leslie W. Rodger (McGraw‐Hill, London, 1984), 280 pages, £10.95. ISBN 0–07–084728–2.

ANALYSIS FOR STRATEGIC MARKET DECISIONS by George S. Day (West Publishing Co., St. Paul, Minnesota, 1986), ISBN 0–314–85227–1.

MARKETING FOR THE CONSTRUCTION INDUSTRY by Norman Fisher (Longman, Harlow, Essex, 1986), 270 pages, £19.95 HB. ISBN 0–582–503302.

SOURCES OF UNOFFICIAL UK STATISTICS by David A. Mort and Leona Siddall (Gower Publishing Co., 1985), 457 pages, £45.00. ISBN 0–566–02620–1.

HOTEL & FOOD SERVICE MARKETING by Francis Buttle (Holt, Rinehart and Winston, London, 1986) 406 pages, £9.95. ISBN 0–03–910682–9.

POSITIONING: THE BATTLE FOR YOUR MIND by Al Ries and Jack Trout, first edition revised (McGraw‐Hill, New York, 1986), 213 pages, £17.95 hardcover. ISBN 0–07–065264–3.

BUSINESS WARGAMES by Barrie G. James (Abacus Press, Tunbridge Wells, 1984), 254 pp., £14.95. ISBN 0–85626–441–5.     

The Effect of the Tipped Minimum Wage on Employees in the U.S. Restaurant Industry

According to federal law in 2013, employers can take a credit of up to $5.12 for tips received by workers in satisfying the minimum‐wage requirement of $7.25. This article uses interstate variation in laws regarding tip credits and minimum wages to identify the effects of reducing or eliminating the tip credit on employment, hours, and earnings in the U.S. restaurant industry. Using data from the Quarterly Census of Employment and Wages and the Current Population Survey, we find that a reduction in the tip credit increases weekly earnings but reduces employment in the full‐service restaurant industry and for tipped workers. The results are robust to controls for spatial heterogeneity in employment trends and are supported by a series of falsification tests.     

Is Bigger Still Better? The Decline of the Wage Premium at Large Firms

This study shows that the wage premium paid by large firms fell over the past 20 years and that this decline in the size premium is most pronounced among the least educated workers. Empirical evidence supports several explanations for the shrinking size premium. First, there has been a convergence in the returns to worker characteristics at large and small firms over time. Second, small and large firms are hiring more workers with similar characteristics. Particularly important are the declining share of workers at large manufacturing firms and the rising share of workers at large retail firms. Also, the greater decline of unionism at large firms has contributed significantly to the decline in the size premium.     

Demographic Factors and Price Distortions in Insurance

Few papers have analyzed the potential linkages between price distortions and the specific demographic and political traits of customers. The existence of price distortions may have adverse and potentially unintended impacts on certain demographic groups, leading to significant public policy concerns. The current study uses census tract data and rating factors to examine age, income, and race demographics in an effort to determine if any subgroups of the population are adversely impacted by the price distortions of property insurance. The results suggest that Hispanics, lower income households, and specific age groups pay relatively more for insurance coverage than comparison groups.