Accident Externality Research Articles

Accident externality of driving: evidence from the London Congestion Charge

Abstract This paper estimates the marginal accident externality of driving in Central London by exploiting variation in traffic flow induced by the London Congestion Charge Zone using an instrumental variable approach. The charge attributed to a 9.4% reduction in traffic flow, which resulted in a less than proportional 6.0% and 7.6% decrease in accidents and slight injuries, and a 6.5% increase in serious injuries/fatalities. Our preferred estimates indicate that the accident, slight injuries and serious injuries/fatalities rate elasticities with respect to traffic flow are −0.36, −0.19 and −1.65, respectively. These estimates imply that the marginal external benefit of road safety from an additional kilometer driven is approximately £0.16. The marginal accident externality is positive, as the marginal driver along congested roads decreases the risk and severity of traffic collisions for other road users by slowing others down and increasing awareness.

The environmental cost and the accident externality of driving: Evidence from the Swiss franc's appreciation

AbstractThis study investigates the effects of driving on air quality and road safety by exploiting exogenous variation in traffic flows associated with the Swiss franc's appreciation. It shows that the higher mobility along the border increased the nitrogen oxides concentration during peak hours on working days and the risk of car accidents during the late morning on nonworking days. The elasticity of both variables of interest with respect to the number of cars turns out to be larger than one. This suggests the need for programs that treat traffic congestion, air quality, and road safety jointly and has implications for optimal road use pricing.

The accident externality from trucking: Evidence from shale gas development

A heavy truck imposes an externality if its presence causes traffic accidents for which it is not held liable. We estimate the increase in accidents that occur when a truck is added to a road using quasi-experimental variation in truck routes of connecting shale gas wells in Pennsylvania. We find evidence that adding a truck to a road is relatively safe for the truck itself, but less so for other cars on the road: an additional truck leads to an increase in the number of car-only accidents. However, these additional accidents are not more severe. Finally, we find suggestive evidence that the accident externality of trucking reverberates to even more road users through higher car insurance premiums.

Taxed to death? Freight truck collision externalities and diesel taxes

This paper decomposes the external accident costs of freight trucking into two components—truck miles traveled and truck weight. The effects of miles traveled and weight on accidents are then applied to an analysis of diesel fuel taxes, which reduce truck miles traveled and increase truck weight. Exploiting a unique data set of 3.5 billion truck-level observations, I find that both measures of trucking activity increase the quantity of collisions, and truck-weight increases skew the collision distribution toward fatal outcomes. Heavier trucks do not alter the truck-only collision severity distribution, suggesting truckers do not experience truck-weight internalities. The increase in fatal collisions caused by levying a diesel tax that prices carbon emissions offsets the gains from reductions in pollution, congestion, and total collisions. The $0.37 per gallon diesel tax increase exacerbates the trucking accident externality to such an extent that it increases the external costs of trucking by $55.7 billion/year while also creating deadweight loss in the trucking industry.

Accident Externality of Driving: Evidence from the London Congestion Charge

This paper estimates the marginal accident externality of driving in Central London by exploiting variation in traffic flow induced by the London Congestion Charge Zone using an instrumental variable approach. The charge attributed to a 9.4% reduction in traffic flow, which resulted in a less than proportional 6.0% and 7.6% decrease in accidents and slight injuries, and a 6.5% increase in serious injuries/fatalities. Our preferred estimates indicate that the accident, slight injuries, and serious injuries/fatalities rate elasticities with respect to traffic flow are -0.36, -0.19 and -1.65 respectively. These estimates imply that the marginal external benefit of road safety from an additional kilometre driven is approximately £ 0.16. The marginal accident externality is positive, as the marginal driver along congested roads decreases the risk and severity of traffic collisions for other road users by slowing others down and increasing awareness.

Accident Externality of Driving: Evidence from the London Congestion Charge

This paper estimates the marginal accident externality of driving in Central London by exploiting variation in traffic flow induced by the London Congestion Charge Zone using an instrumental variable approach. The charge attributed to a 9.4% reduction in traffic flow, which resulted in a less than proportional 6.0% and 7.6% decrease in accidents and slight injuries, and a 6.5% increase in serious injuries/fatalities. Our preferred estimates indicate that the accident, slight injuries, and serious injuries/fatalities rate elasticities with respect to traffic flow are -0.36, -0.19 and -1.65 respectively. These estimates imply that the marginal external benefit of road safety from an additional kilometre driven is approximately £ 0.16. The marginal accident externality is positive, as the marginal driver along congested roads decreases the risk and severity of traffic collisions for other road users by slowing others down and increasing awareness.

The Accident Externality from Trucking

The Accident Externality from Trucking

The accident externality of driving: Evidence from observance of the Jewish Sabbath in Israel

We document and measure an externality of driving, whereby a driver’s decision to take to the road affects fellow drivers risk of accident. Because religious Jews refrain from driving during the Sabbath, traffic on Israeli roads decreases sharply when the Sabbath begins each Friday, at a precisely defined time before sundown, and increases after the Sabbath ends on Saturday evening, at a precisely defined time after sunset. Using plausibly exogenous variation in traffic volume associated with the Sabbath, we estimate the effect of traffic volume on the risk of fatal or injurious accident. We find that a positive accident externality emerges only at the Sabbath exit, when traffic volumes are greater. Remarkably similar results arise when the analysis is confined to non-Jewish drivers, whose travel choices are not bound by the precise timing of the Sabbath, supporting the interpretation that our findings reflect an externality. Finally, the effect emerges mainly on a class of road sections that is considered highly perilous, suggesting that the interaction of traffic volume and road perilousness is important for understanding this issue and shaping implicated policy.

Road pricing for congestion and accident externalities for mixed traffic of motorcycles and automobiles

Motorcycles play an important role in sharing the trip demand with automobiles for commuting, especially in many cities in Asia. However, the accident cost of a trip by motorcycle is higher than that of an automobile. This study analyzes the road pricing for the congestion and accident externalities of mixed traffic of automobiles and motorcycles. A model for equilibrium trips with no taxation and that for optimal trips with taxation are explored. The model is then applied to the Tucheng City–Banciao City–Taipei central business district corridor in Taipei metropolitan area. The findings in this case study show that the tax for accident externality is larger than that for congestion externality.

The optimal aviation gasoline tax for U.S. general aviation

This study estimates the optimal aviation gasoline tax for U.S. general aviation that takes into account the accident, lead pollution, and greenhouse gas emission externalities, as well as the balance between excise taxes and labor taxes to finance government spending. The calculated optimal tax rate is $3.60gal−1, which is over 18 times greater than the current tax rate and 5 times greater than the Federal Aviation Administration proposed tax rate. The Pigovian component is $0.89, and we observe that the accident externality is taxed more severely than the pollution externality. The largest component of the optimal tax rate is the Ramsey component at $2.70, which reflects the ability of the government to raise revenue from a price inelastic good like aviation gasoline. The optimal tax is estimated to reduce lead emissions by 9%, greenhouse gas emissions by approximately 18% and accidents by 17%.

Heterogeneity of the Accident Externality from Driving

AbstractThis article examines the accident externality from driving in terms of loss probability and severity by using a unique individual‐level data set with more than 3 million observations from Taiwan. Two types of accident externality are, respectively, measured: the average number of kilometers driven per month per vehicle and the total number of speeding tickets per month. For both variables, we find significant evidence to support the existence of the accident externality. Moreover, we find that the accident externality is heterogeneous in terms of the vehicles’ characteristics.

Traffic safety and vehicle choice: quantifying the effects of the ‘arms race’ on American roads

SUMMARYThe increasing share of light trucks in the USA has been characterized as an ‘arms race’ where individual purchases of light trucks for better self‐protection nevertheless worsen traffic safety for society. This paper investigates the interrelation between traffic safety and vehicle choice by quantifying the effects of the arms race on vehicle demand, producer performance, and traffic safety. The analysis suggests that the accident externality of a light truck amounts to $ 2444 during vehicle lifetime and that 12% of new light trucks sold in 2006 and 204 traffic fatalities could have been attributed to the arms race. Copyright © 2010 John Wiley & Sons, Ltd.

On the contribution of external cost calculations to energy system governance: The case of a potential large-scale nuclear accident

The contribution of nuclear power to a sustainable energy future is a contested issue. This paper presents a critical review of an attempt to objectify this debate through the calculation of the external costs of a potential large-scale nuclear accident in the ExternE project. A careful dissection of the ExternE approach resulted in a list of 30 calculation steps and assumptions, from which the 6 most contentious ones were selected through a stakeholder internet survey. The policy robustness and relevance of these key assumptions were then assessed in a workshop using the concept of a ‘pedigree of knowledge’. Overall, the workshop outcomes revealed the stakeholder and expert panel's scepticism about the assumptions made: generally these were considered not very plausible, subjected to disagreement, and to a large extent inspired by contextual factors. Such criticism indicates a limited validity and useability of the calculated nuclear accident externality as a trustworthy sustainability indicator. Furthermore, it is our contention that the ExternE project could benefit greatly – in terms of gaining public trust – from employing highly visible procedures of extended peer review such as the pedigree assessment applied to our specific case of the external costs of a potential large-scale nuclear accident.

Traffic Congestion and Accident Externality: A Japan-U.S. Comparison

Abstract We measure the accident externality from driving in the spirit of Edlin and Karaca-Mandic (2006). We collect data that parallel those used in Edlin and Karaca-Mandic and apply their empirical method to gain further insights about the accident externality. Consistent with Edlin and Karaca-Mandic, we find larger external costs for higher density roads, although the sizes largely depend on the variable definition and the model specification. One intriguing result is that per-vehicle external costs are considerably smaller in Japan than those in the U.S. In Kyoto, for example, an additional driver increases accident costs for other drivers by $248--$802, while it is $1,725--$2,432 in California where the traffic density is approximately the same. However, on a per-mile basis, much closer externalities are obtained. This finding indicates that the large externality in high-density roads underscored in Edlin and Karaca-Mandic is partly attributed to the fact that U.S. drivers drive longer distances, comparatively speaking.

Traffic Safety and Vehicle Choice: Quantifying the Effects of the 'Arms Race' on American Roads

The increasing market share of light trucks in the U.S. in recent years has been characterized as an “arms race” where individual purchase of light trucks for better self-protection in collisions nevertheless leads to worse traffic safety for the society. This paper investigates the interrelation between traffic safety and vehicle choice by quantifying the effects of the arms race on vehicle demand, producer performance, and traffic safety. The empirical analysis shows that the accident externality of a light truck amounts to $2,444 in 2006 dollars during vehicle lifetime. Counterfactual simulations suggest that about 12% of new light trucks sold in 2006 and 204 traffic fatalities could be attributed to the arms race.

Erratum: “The Accident Externality from Driving”

The estimates reported in specification 5 of table 5 -- Yearly External Accident Cost of Marginal Driver for Select States, 1966 -- in our article “The Accident Externality from Driving” published in this Journal (vol. 114 [October 2006]: 931–55) are incorrect. The correct estimates and an explanation of what led to the error are provided.

Integrating Accident and Travel Delay Externalities in an Urban Speed Reduction Context

Accident externality costs remain controversial in terms of their costing and valuation. Much of the literature on accident and travel delay externalities treats each source as mutually exclusive and additive, yet common sense suggests that interdependencies prevail. One example of this is the recognition that accident externalities are not independent of travel delays, and hence travel time savings and losses are influenced by policy designed to reduce the risk of exposure to accidents. Reduced maximum speed limit restrictions also add costs in terms of loss of travel time (and increased speed limits produce travel time benefits). Also, lowered speed limits may lead to more drivers risking exceeding the speed limit because of perceived time loss, thereby exacerbating the potential for accidents. The paper takes a close look at the empirical relationship between accident and travel delay externalities in an urban setting, accounting for the risk‐compensating behaviour under conditions of greater accident risk. Recognizing that levels of risk in an urban setting are broadly a function of traffic densities and that the latter can be approximated by the mix of free flow and non‐free flow travel time (for a given total travel time), an aggregate marginal externality cost function is used to quantify empirically the input elements in the context of a driver’s choice between a free and a tolled route in Sydney, Australia. This discrete choice context is sufficient, given an externally established relationship between speed and traffic density, to quantify the marginal externality accident and travel time delay costs. It is shown what additional externality has to be factored into the accident costs to recognize the other sources of externality typically ignored in accident costing and speed restriction studies.

The Accident Externality from Driving

We estimate auto accident externalities (more specifically insurance externalities) using panel data on state‐average insurance premiums and loss costs. Externalities appear to be substantial in traffic‐dense states: in California, for example, we find that the increase in traffic density from a typical additional driver increases total statewide insurance costs of other drivers by $1,725–$3,239 per year, depending on the model. High–traffic density states have large economically and statistically significant externalities in all specifications we check. In contrast, the accident externality per driver in low‐traffic states appears quite small. On balance, accident externalities are so large that a correcting Pigouvian tax could raise $66 billion annually in California alone, more than all existing California state taxes during our study period, and over $220 billion per year nationally.

The Accident Externality from Driving

We estimate auto accident externalities (more specifically insurance externalities) using panel data on state-average insurance premiums and loss costs. Externalities appear to be substantial in traffic dense states: in California, for example, we find that a typical additional driver increases the total of other people's insurance costs by $2231 per year. In such states, an increase in traffic density dramatically increases aggregate insurance premiums and loss costs. In contrast, the accident externality per driver in low traffic states appears quite small. On balance, accident externalities are so large that a correcting Pigouvian tax could raise $45 billion annually in California alone, and over $140 billion nationally. The extent to which this externality results from increases in accident rates, accident severity or both remains unclear. It is also not clear whether the same externality pertains to underinsured accident costs like fatality risk. Composed using speech recognition software. Misrecognized words are common.

Road Accidents and Traffic Flows: An Econometric Investigation

This paper develops an empirical model of the relationship between road traffic accidents and traffic flows. The analysis focuses on the accident externality, which is determined mainly by the difference between the marginal and average risks. The model is estimated using a new data‐set which combines hourly London traffic count data from automated vehicle recorders together with police records of road accidents. The accident‐flow relationship is seen to vary considerably between different road classes and geographical areas. More importantly, even having controlled for these and other differences, the accident externality is shown to vary significantly with traffic flows. In particular, while the accident externality is typically close to zero for low to moderate traffic flows, it increases substantially at high traffic flows.