An economic model of highway fatalities

Abstract

Where can state, local and federal government officials concentrate their resources in order to reduce the highway fatality rate?

A highway fatality model was developed to determine which factor has the greatest positive or negative impact on the highway fatality rate. A cross-section of data from states for 1984 and 1985 was collected for the following variables: average speed, speed variance, percentage of drivers wearing seat belts, percentage of licensed male drivers, percentage of drivers under 25 years of age, drinking age for beer, per capita alcohol consumption, percentage of urban population, and percentage of urban roads.

The highway fatality equation was estimated via an iterative approach using ordinary least squares. The variables testing significant include: average speed, speed variance, drinking age for beer, percentage of drivers under 25 years of age, and percentage of urban roads.

When translating the results into a policy action, it was determined that keeping the speed limit at 55 MPH on rural interstates would prevent the greatest number of traffic fatalities. Other policy actions considered in order of their impact on highway fatalities include: more stringent enforcement of the 55 MPH speed limit, restricting teenage night-time driving, raising the driving age to 17 years of age, and raising the drinking age for beer to 21 in the seven remaining states.