THE CAR ENGINE IMMOBILISER: Benefits of mandatory anti-theft device greatly exceed costs

Car theft rates have declined spectacularly as a result of the electronic engine immobiliser, an anti-theft device that the European Union (EU) made mandatory for new passenger vehicles in 1998. According to a study by Jan van Ours and Ben Vollaard, two economists at Tilburg University, the benefits in terms of prevented thefts are at least three times higher than the costs of installing the device.

The electronic engine immobiliser is a simple and low-cost anti-theft device that makes it very difficult to steal a car when the key is not in the ignition. Because of the EU regulation, the share of passenger cars on the road with the device has grown rapidly – from close to zero in the first half of the 1990s to around 95% now.

The study, which is published in the June 2016 Economic Journal, provides a first estimate of both the protective effect and the displacement effect of the engine immobiliser on the nation-wide rate of car theft in the Netherlands. When taking account of displacement of theft to older cars, the device lowered the overall rate of car theft by about 40% between 1995 and 2008. The effect was largest for city car and economy models – those least likely to be fitted quickly with the device if its use had not been mandated.

An estimate of the overall crime-reducing effect is a necessary input for a comparison of the costs and benefits of the regulation. The authors estimate that 34 cars need to be fitted with the device (at a per unit cost of €50) to avert one theft. The costs of €1,700 per prevented theft are many times lower than the average cost to society of a car theft.

The authors comment:

''Our study provides empirical evidence on a road less travelled in fighting crime: strengthening victim precaution. Crime policies as well as research on crime prevention tend to focus on measures that punish or rehabilitate offenders.

''We show that efforts focused on potential victims – such as making a simple, unobtrusive measure like the engine immobiliser mandatory – have crime-reducing effects of a size that would be difficult to achieve with offender-focused policies, and at attractive cost-benefit ratios.''

The authors use the EU regulation as a source of quasi-experimental variation in use of the security device. The regulation made application of the car security device conditional on the year of manufacture rather than the risk of theft of a vehicle. The resulting shock in security allows estimation of the causal effect by comparing theft rates of cars that were manufactured before and after the change in regulation.

The analysis is based on a sample of 24 car models that are representative of the different segments of the market for passenger cars. For each model, the authors had detailed data on the composition of the fleet by calendar year and model year as well as on the number of thefts by calendar year and model year, provided by the Netherlands Department of Motor Vehicles (RDW).

''The Engine Immobiliser: A Non-starter for Car Thieves'' by Jan van Ours and Ben Vollaard is published in the June 2016 issue of the Economic Journal. Jan van Ours and Ben Vollaard are at Tilburg University.