Traffic Fatalities and Economic Growth

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This dissertation adds to the current understanding of the socioeconomic determinants of traffic fatality rates by examining the variation in road deaths across countries and over time. Chapter two investigates the relationship between road safety and economic development within an Environmental Kuznets Curve framework. Reduced-form models of fatality risk as a function of per capita income are estimated using panel data for over 80 countries. The results confirm an inverted U-shaped relationship with income, with traffic fatality risk (fatalities per population) beginning to decline at incomes similar to those found for several environmental externalities. The turning point is driven by the rate of decline in fatalities per vehicle as income rises, since motorization rates (vehicles per population), while increasing with income at a decreasing rate, never decline with economic growth. This suggests that road safety improvements accompanying income growth depend on policies that reduce fatalities per vehicle rather than on reducing motorization.

Projections suggest that the global road death toll will grow by 66% between 2000 and 2020 if historic trends continue. This number, however, reflects divergent rates of change in different parts of the world.

Chapter three focuses on factors underlying the decline in fatalities per distance traveled, i.e., the downward sloping part of the road safety Kuznets curve. Formal models of traffic fatalities are developed for vehicle occupants and pedestrians. Reduced-form approximations to these models are estimated using panel data for over 30 high-income countries over 1964-2002.

Estimates suggest that demographic changes and road building contributed to declines in both vehicle occupant and non-occupant fatality rates. In addition, increases in the size of the vehicle fleet, as predicted by theory, have increased occupant deaths while decreasing pedestrian deaths per distance driven. Improvements in medical care also played a role in reducing both fatality rates. The results do not offer evidence of a significant increase in demand for risky driving in response to newer, safer vehicles or seatbelt usage. The extent to which alcohol and increases in the elderly population have detrimental effects on fatality rates is found to be twice as large for pedestrians as for vehicle occupants.