Apparently, rising gas prices are making the roads safer. Researchers from the University of Alabama and Harvard Medical School estimate that every 10 percent increase in gas prices reduces traffic fatalities by 2.3 percent. All told, $4/gallon gas could save more than 12,000 lives across the US each year—upwards of 1,000 each month.
Below, Michael Morrisey of the University of Alabama explains.
The money quote:
When gasoline prices are higher, people drive less, and driving less they’re exposed to fewer crashes, and as a consequence to fewer fatalities.
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Although the news headlines focus on fatalities, non-fatal crashes also fall when people drive less. The National Safety Council estimates that for each each crash fataility, there are roughly 54 serious crash injuries, and 198 crashes that only damage property and minor injuries. So 12,000 fewer crash fatalities corresponds to about 3 million fewer crash incidents all told—a tremendous reduction.
The decline in crashes is obviously good news for the families that are spared the devastation of a fatality or serious injury. But the larger economy benefits, too. The National Safety Council uses a rule of thumb that each crash fatality corresponds to $5.8 million in direct economic impacts—a figure that includes lost lifetime wages, property damage, administrative expenses, and simlar costs. (To be clear: this includes costs not just for each fatality, but also for the more than 250 non-fatal crash incidents per crash fatality.) By that figure, reducing crash fatalities by 12,000, for just a single year, provides an economic boost of about $70 billion nationwide.
But that’s a low-ball estimate, since it’s purely a monetary measure—not a measure of pain and suffering, or a willingness to pay to avoid injury. Using more comprehensive “willingness to pay” figures, that $70 billion figure may double or even triple.
Still, the overall economic benefits of crash reductions aren’t quite enough to offset the costs to families from higher gas. As far as I can gather, the study looks at a rise in gas prices from about $1.50 per gallon (the inflation-adjusted level for most of the 1990s) to today’s price of roughly $4 per gallon. My back-of-the-envelope estimate is that this cost increase siphons $335 billion dollars out of family’s pocketbooks (though some of that gets cycled back into wealthier families stock portfolios, through higher oil company earnings).
So the $70 billion in direct economic benefits of avoided crashes is definitely a silver lining to high gas prices. But it’s a silver lining to what, for many families, is a very gloomy cloud.