Gasoline Prices and Road Fatalities: International Evidence

Abstract

This study utilizes data for 144 countries from 1991 to 2010 to present the first international estimates of the gasoline price elasticity of road fatalities. We instrument each country's gasoline price with that country's oil reserves and the yearly international crude oil price to address potential endogeneity concerns. Our findings suggest that the average reduction in road fatalities resulting from a 10% increase in the gasoline pump price is in the order of 3%-6%. Around 35,000 road deaths per year could be avoided by the removal of global fuel subsidies. (JEL R41, H23, O18, Q43) * We are grateful for comments from

Fuel Prices and Road Deaths in Australia

“…As a demonstration of the magnitude of the effect on road safety, our estimates suggest that Australia's current fuel tax arrangements reduce the national road toll by more than 150 deaths per year. 7 Consistent with this finding, Burke and Nishitateno (2015) concluded that countries that subsidise rather than tax fuel sales tend to have higher road death tolls (all else equal).…”

“…Burke & Yang, ; Burke & Abayasekara, ), with the link to road deaths being that road death risks are themselves associated with the demand for gasoline . Burke and Nishitateno (, ) and Gillingham () used a similar strategy in estimating the effects of fuel prices on various road‐sector outcomes.…”

“…They found a fuel price elasticity of road deaths of À0.2, similar to our estimates using monthly data for Australia. Burke (2014) and Burke and Nishitateno (2015) used annual data for up to 144 countries and found that the long-run fuel price elasticity of road deaths is around À0.3 to À0.6.…”

“…We also present a specification that includes a lagged dependent variable. Note that the cross-country estimation approach of Burke and Nishitateno (2015) employed a method that avoids the unit root issue altogether.…”

Determination of the Main Influencing Factors on Road Fatalities Using an Integrated Neuro-Fuzzy Algorithm

“…Macinko et al, (2015) studied the effect on motor vehicle fatalities of the two influencing factors position in the car and the sex of the driver. Burke and Nishitateno (2015) studied the effect of gasoline price on road fatalities and showed that a 10% increase in the gasoline pump price will result in 3%-6% decline in fatalities. Castillo-Manzano et al (2015) examined the impact on the traffic accident rate of the interaction between trucks and cars on Europe's roads using a panel data in 1999-2010.…”