Empirical Analysis: Volvo Drivers Suck?


In response to a good suggestion from Thomas on my earlier post, I decided to do some empirical analysis on the theory of Volvo Driver Suckage.

I found an online quotation tool where I could fix variable like price, security features, mileage, driver, etc. to try and make the comparison as even as possible. I found comparable makes and models, all 4 doors, to get the following numbers:

  • Volvo S60 T5: $1336 a year
  • BMW 328i: $1330 a year
  • Audi A4 3.2: $1317 a year
  • Infinity G35x Sport: $1268
  • Acura TL Type S: $1222 a year

So, assuming all other things are equal (rate of theft, cost to repair, etc.) this data does not lend credibility to the theory, since higher incidents of accidents for a particular type of vehicle should be reflected in a higher insurance rate. While the Volvo is the highest here, it is very close to the BMW, who’s drivers are known for being assholes, nor for being bad drivers (before you flame me, I drive a BMW, so I am poking fun at myself here). This method of analysis appears inconclusive.

I also checked to see if there was any variability for a female driver, but it gave me the exact same quote prices.

Hey Thomas, any theory on how we prove the asshole theory?  🙂

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6 Responses

  1. Multiple causal factors could be at play here, with Volvo drivership as a coincident phenomenon.

    For example, your local Volvo dealer may have a sales strategy that involves dispatching sales staff to hang out in traffic court, waiting to find wealthy violators of road safety. As they make their way out to pay fines or attend remedial driving courses, the sales staff make a pitch. Rather than improving their driving habits, these imprudent wankers should invest in a car with a legendary safety reputation like a Volvo.

    Then again, there’s been a long-standing myth in insurance circles about red cars. Did you happen to notice whether these assholes were driving RED Volvos?

    I think the ultimate hurdle you suffer in this noble experiment is the lack of a subjective and quantifiable direct measure of assholery. The insurance quote suggestion was my attempt to get around that problem. I’m not sure that you can dismiss the differences here as insignificant. Indeed, the insurance market is rich with data and therefore, they have strong indicators of the type of car most likely to be driven by an asshole.

    While Leary (1993) offers irrefutable anecdotes that define the condition, they are neither exhaustive nor sufficiently relative for our purposes. Still, I’m sure that Leavitt and Dubner or some other pop economists have a method in the wings for their next best-seller.

    There has been a lot of interesting chitter chatter lately about the potential for predictive markets that allow the wisdom of crowds to express itself in securitized form. However, this has focused on positive qualities. For example, a 26-year old Double A ball player has recently sold shares in his future earnings at the Major League level. If the market were heavily traded (and therefore, we presume, well-researched), the value of this pitcher’s “shares” would be a strong indicator of his future prospects in the eyes of those who pay attention to his fundamental skills and prospects. Most crucially, there’s money on the table. The more money at stake in the prediction, the more likely someone is to undertake thorough research, building on the mass of collective wisdom and research proportionally represented in the ballplayer’s share price.

    Sports wagering offers a rich history of this kind of market in a more conventional application. Similar tools are being rolled out for election predictions.

    However, in our case, we should be able to “short-sell” bad drivers based on such obvious hallmarks as Volvo ownership. In a sense, we’re back to the insurance market, except that there are very few participants in that market – mostly big insurers and their actuaries. So how could we open up the market to allow collective wisdom to rat out Volvo drivers, minivan drivers, Upper Canadians, etc by short selling them?

    It is unwise ask an economist such a question; even less wise to ask a bad economist.

  2. Mr. B.
    I totally love the insurance analysis mode as that is a free market proxy that fits the analysis. However you do have to consider the average demographic of a Volvo driver vs the other. For example, despite you and I being in the same age range, I have the insurance benefit of a wife, one child, no speeding tickets in 10 years, drive ~50km per day, one claim (some broke into my car) about 7 years ago, a 2007 Pathfinder and home insurance with the same outfit, group discount under PEO, etc. i.e read low risk and not a bad driver. As such, with my black (not RED) Volvo S60 T6 2002 I pay ~$45 per month for insurance. i.e. $796 per year less than the $1336 you online tool estimated.

    In addition, I am wondering if picking BMW, Audi, etc. is capturing the right demographic for a fair comparison. Maybe it is somewhat of a reasonable class of car compare but not a type of driver compassion. Also with respect to Volvo you have to consider the breath of differences in their product line up and the type of driver each is attracting. S40 budget safety car, S60 T5 sporty family car, S80 some guy with more money than brains, XC family adventure dude, you know what I am saying.

    What was the model of car in your specific incident and did you get a view of the driver. If in the Bay Shore area you know now many ‘new’ Canadians we have in that area and we all know about the problem of transferring driving ‘skills’ and rules of the road from one country to another. To me that is more the analysis that you want to consider. In fact, it is that group of people who should be forced to go to driving school and learn the Canadian rules of the road.

    Peter

  3. Thanks Thomas!

    Actually the asshole theory I was referring to (in jest) was an asshole BMW driver. 🙂

    The Volvos in question were never red, usually grey or light blue. Most of the ones I noticed were actually older ‘boxy’ Volvos from the early 90’s and earlier; so the demographic is not well represented by my insurance quotes! There is another urban myth about Volvo drivers (particularly on the West coast) that they smoke a lot of pot, which may explain our observations better.

    I am a fan of Leary’s work, but I agree that his anecdotes were not exhaustive enough. Hopefully he will follow up with a sequel to complete his work. He also neither mentioned Volvos or BMWs.

    Also, I highly doubt you are a ‘bad economist’. 🙂

    The concept of ‘predictive markets’ is awesome, I have been trying to think of ways of leveraging it in the workplace. I find creating the market is much less challenging than coming up with the right question! I have actually paid to use the Facebook polling feature to try and make stock picks, but the system does not require people to put money on their bets, so it is not a ‘predictive market’ by ‘The Wisdom of Crowds’ definition.

  4. “In addition, I am wondering if picking BMW, Audi, etc. is capturing the right demographic for a fair comparison. Maybe it is somewhat of a reasonable class of car compare but not a type of driver compassion.”

    Yah, I had the same concern Peter. In hindsight, I was trying to pick cars I knew to balance the pricing at even levels, but these might not illustrate the right demographic (well, I kinda hope it doesn’t).

    I have to go back to that quoting tool and see if I can price out one of these boxy Volvo’s which appear to be the crux of the problem.

  5. Okay, I drive a Volvo and I like this car. Even if it costs a little extra, it worth it for the security. Volvo are very safe cars, you should be ashame to say Volvo sucks!

    Sorry for my english BTW..

  6. Actually my original complaint was on the quality of the drivers. My theory was that cars that focus their marketing on safety might attract bad drivers as clients in greater numbers than other manufacturers. The ‘proof’ provided by the insurance quotes don’t really bear this out.

    I actually like Volvo cars, the S60 I had as a rental car in Europe was great!

    Thanks for taking the time to read my blog!

    A.

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