Fly Straight

Eric A. Helland and Alexander Tabarrok have a new article "Product Liability and Moral Hazard: Evidence from General Aviation" in the Journal of Law and Economics. As Alex Tabarok explains at Marginal Revolution, a 1994 change in the law made makers of small general aviation airplanes no longer liable for product failures for airplanes more that 18 years old. This resulted in owners and pilots taking more care - enough additional care that the probability of an accident fell 13%.