The Impact of Premium Gasoline Price and Income Per Capita on Traffic Accidents: An Evidence from Panel Data Regression

Abstract

Accident and safety cannot be separated due to their trade-offs by an individual when carrying out activities. Accident and safety issues are global issues and are being investigated. This study examines the impact of premium gasoline prices and per capita income on traffic accidents in 21 districts and cities in Aceh Province of Indonesia. This study used panel data from five years and 21 districts/cities. This research model uses a random effect model. The results showed that premium gasoline prices negatively affect income per capita and traffic accidents positively. These results fit theoretically. The effect of the price of 0.13 percent and income of 0.96 percent if there is an increase of 1 percent. The impact of income per capita is 7.38 times compared to premium gasoline prices. Then, the elasticity of income approach is elastic while the price is inelastic. The increase in per capita income causes people to buy more private vehicles, so the government needs regulation and socialization of the transfer of private vehicles to public transportation. Then, the police continue to urge the people to be careful in driving and a pioneer in traffic safety.