Drink driving limits revisited

A private member's bill proposing a reduction in the drink driving limit was drawn from the ballot.

Last year, I ran some ball-park numbers on what would be needed for it to make sense to reduce the drink driving limit from 0.08 (the current limit) to 0.05 (the limit proposed by Labour MP Ian Lees-Galloway's Private Member's Bill).

While you would have some reduction in crashes among drivers in that range, you'd also have losses in consumption benefits among drinkers who would have driven home safely at 0.07.

My very rough conclusion was that if those in the .05-.079 range suffered reduced consumer surplus of less than $4 per night out, then the policy could make sense, and if those in that range suffered losses greater than $4 per night out, then the policy would fail. Let's walk through the figures.

Keall et al, 2004, estimated the New Zealand death rate per million trips for a few Blood Alcohol Content intervals. Among those with no alcohol, the death rate per million trips was 0.2 for both males and females.

For those in the .005-.055 range, they found no accidents for women and 0.4 deaths per million trips for men. The Value of a Statistical Life (VSL) for policy purposes in New Zealand is $3.77 million.

The excess death rate per million car trips among those in the 0.055 to .105 range is 1.2 for women and 1 for men. So we'll average that at 1.1. Every million car trips taken by drivers in the 0.055 to .105 range costs $4.147 million dollars in expected VSL losses. To the extent that this includes fatalities incurred by the driver, it massively overestimates social cost, which is normally construed as costs drink drivers impose on other people. But it also doesn't count any of the costs of non-fatal accidents as the Keall et al study only looked at fatal crashes.

So if we only count fatality costs and count all of the fatality costs falling on the driver him or herself, then it would make sense to reduce the drink driving limit from .105 to .055 if drinkers would be no more than $4.15 worse off per trip as consequence.

You may see a problem here: the current drink driving limit is 0.08, not 0.105, the risk of accident is strongly increasing in BAC, and this earlier data includes the very high drink driving accident rates among 15-19 year olds, who are now subject to a zero percent limit. We really need new data.

But let's take the numbers as they here stand and suppose that the costs of non-fatal accidents are on par with the self-imposed fatality costs incurred by drinking drivers. The $4 figure then is within the ballpark, but note the overestimate problems as it does include people in the 0.08 to 0.105 range and teenagers now subject to a zero percent rule.

Do you expect that most people enjoying a night out would be willing to accept $4 to be subject to a 0.05 rather than a 0.08 limit? Don't tell me "Oh, I would, because I never have that much anyway."

This question isn't for you. This question is for those who go out for the night and either worry that they've exceeded 0.05 or know that they're in the 0.05 to 0.08 range. As you walk into the bar someone offers you $4 and says "You can have this $4 if you can guarantee that you'll stay under 0.05 tonight." If most drinkers subject to the risk take the $4, and if the $4 is ballpark correct, then moving to 0.05 makes sense. If you'd have to offer them more than $4, then it's a value-destroying proposition.

The numbers here are pretty rough. I put them together a year ago while waiting for the folks at MoT to provide me with some more recent figures on the proportion of drivers on the road who are in the .05-.08 range.

They never got back to me with those figures, but the fault is mine as I didn't pester them; I got busy with other things. I'll have to ask MoT again for their more recent numbers in hopes that I might be able to revise things before the Bill is debated.

Dr Eric Crampton is a senior lecturer in economics at the University of Canterbury. He blogs at Offsetting Behaviour.