Study Results from Monash University Provide New Insights into Risk Management (The effect of ‘smart’ financial incentives on driving behaviour of…

Study Results from Monash University Provide New Insights into Risk Management (The effect of 'smart' financial incentives on driving behaviour of novice drivers)

By a News Reporter-Staff News Editor at Insurance Weekly News -- Current study results on Risk Management have been published. According to news reporting originating in Clayton, Australia, by VerticalNews journalists, research stated, "Recent studies have demonstrated that financial incentives can improve driving behaviour but high-value incentives are unlikely to be cost-effective and attempts to amplify the impact of low-value incentives have so far proven disappointing. The present study provides experimental evidence to inform the design of 'smart' and potentially more cost-effective incentives for safe driving in novice drivers."

The news reporters obtained a quote from the research from Monash University, "Study participants (n = 78) were randomised to one of four financial incentives: high-value penalty; low-value penalty; high-value reward; low-value reward; allowing us to compare high-value versus low-value incentives, penalties versus rewards, and to test specific hypotheses regarding motivational crowding out and gain/loss asymmetry. Results suggest that (i) penalties may be more effective than rewards of equal value, (ii) even low-value incentives can deliver net reductions in risky driving behaviours and, (iii) increasing the dollar-value of incentives may not increase their effectiveness."

According to the news reporters, the research concluded: "These design principles are currently being used to optimise the design of financial incentives embedded within PAYD insurance, with their impact on the driving behaviour of novice drivers to be evaluated in on-road trials."

For more information on this research see: The effect of 'smart' financial incentives on driving behaviour of novice drivers. Accident Analysis and Prevention, 2018;119():68-79. Accident Analysis and Prevention can be contacted at: Pergamon-Elsevier Science Ltd, The Boulevard, Langford Lane, Kidlington, Oxford OX5 1GB, England. (Elsevier - www.elsevier.com; Accident Analysis and Prevention - www.journals.elsevier.com/accident-analysis-and-prevention/)

Our news correspondents report that additional information may be obtained by contacting D. Mortimer, Monash University, Monash Business Sch, Center Hlth Econ, Clayton, Vic, Australia. Additional authors for this research include J.S. Wijnands, A. Harris, A. Tapp and M. Steyenson.

Keywords for this news article include: Clayton, Australia, Australia and New Zealand, Risk Management, Monash University.

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