The economics of traffic safety

The note examines several possible entry points for debating the economics of traffic safety, namely, the supply side approach, which addresses the cost of accidents to society, and those affected by it; the demand side approach, which addresses the willingness of people to pay, to avoid or curb accidents; the macroeconomic consequences of traffic accidents, and of measures to improve safety, raising questions on the impact of traffic safety on economic growth - an issue subject to much misunderstanding; and, who is responsible, or should pay for. The valuation of traffic accidents consists of two components: the costs of premature loss of life and reduced health quality; and, the loss of income (output) and remedial expenditures (medicinal and material). Variations in estimated costs between countries highlight specific characteristics, such as speed limit variations, monitoring and enforcement, and, compulsory use of seat belts, of headlights during daylight, and, of vehicular, and tire safety controls, in addition to road standards, and maintenance.