Valuation of Traffic Accidents on Rural Roads in Egypt

Road traffic accidents have been increasing sharply in Egypt specially with increasing number of owned vehicles. The developed countries share in road traffic accidents per vehicle kilometer is much less than that for non-motorized (developing) countries of which Egypt is one (with a population of nearly 70 million and a per capita GDP of $1,250 in 2003) when compared to the number of owned vehicles in each. Loss of life and injury of people due to traffic accidents cause very significant economic loss at both the national and the international levels. The current research aims to valuate traffic accidents on rural roads in Egypt. This research uses the Contingent Valuation method to price accidents by type. This method depends mainly on stated preference interview survey with people and interviews with experts and review of any other related data. A special interview has been conducted with 362 individuals with different socio-economic group in Egypt. This interview aimed at reaching the value of either the willing to pay to prevent accidents WTP value, or the willing to accept compensation WTA if accidents occur. The analysis concluded that people in Egypt, which is a developing Muslim country, are unable to define their willingness to pay and consequently, results of the people willingness to accept, WTA, are used. The estimated WTA value for fatal accidents was found to be ten times higher than that for property damage only accidents and about four times higher than that for injury accidents. Data obtained from the review of Census and Economic reports, interviews with experts in the Ministry of Health and in insurance companies are used to define other cost components of accidents such as lost output, medical and hospital care, the administrative costs, and damage to property. The analysis shows that the cost of a fatal accident is four times that of injury accident and 24 times that of property damage only accident. Working with the accident database, the annual national economic loss due to road traffic accidents is estimated as L.E.693,000,000 on rural roads in Egypt (equivalent to $200,000,000 at the time of the interview survey in 2003) . This value is of great benefit in identifying the proper road safety projects to improve the current road safety status in Egypt and in transport project valuation in general.