Modelling the effects of fuel price changes on road traffic collisions in the European Union using panel data

Abstract

Road deaths globally have steadily climbed in recent years with the increase in motorisation. Yet in many economically developed countries they have actually fallen. Explanations for this reduction include the role of improved vehicle and highway design, better enforcement and the impact of the economic downturn, whilst there is also some evidence that microeconomic factors like changes in road fuel prices could be contributing to this situation. This paper investigates the effects of fuel prices on road collision frequency in countries where fuel prices are relatively high. Monthly panel data from 28 EU member states from 2005 to 2018 was analysed for both petrol and diesel prices, and for fatalities, total injury collisions and total collisions using: 1) random effect negative binomial (RENB); and 2) population-averaged negative binomial using generalised estimating equations (GEE). The findings indicate that higher fuel prices lead to lower road traffic deaths, injury collisions and overall collisions across all 28 EU member states. Thus, for every 10 percent increase in fuel prices, there will be a 2.6 percent and 2.2 percent reduction in fatalities for petrol and diesel models, respectively. Similarly, total collisions fall by 1.4 percent for petrol and 1.2 for diesel models, and total casualties fall by 1.6 percent for petrol and 1.4 percent for diesel with every 10 percent rise in fuel price. These results could be due to drivers reducing speed to achieve better fuel efficiency and to people driving less to save money – in particular younger, riskier drivers – hence reducing exposure. These findings suggest that policies replacing petrol and diesel vehicles with alternative fuel sources over the next 20 years could have negative repercussions for road safety if not adequately considered.