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The analysis of international experience in road traffic accident (RTA) damage assessment; development of suggestions on assessing socio-economic and demographic damage caused by RTAs (including consequences for GDP) | 22-01-2007
How much is each of us willing to pay for traffic risk mitigation? Having analyzed international experience in RTAs damage assessment, CEFIR researchers have concluded that a new method of estimating the value of statistical life has to be developed and they also suggest on assessment of indirect RTAs’ consequences.
Project Dates: October 2006 — July 2007 

The on-going CEFIR project has practical significance as it provides the opportunity to adequately estimate the country’s costs associated with road traffic accidents (RTAs) and helps define the optimal amount of investment in the road traffic safety.

Project Objectives:

  • To analyze international experience in RTAs damage assessment;
  • To develop a method of assessing the statistical value of life;
  • To develop suggestions on assessment of indirect RTAs’ consequences (externalities).

Project Summary:

The widespread method of estimating the total damage caused by RTA is to sum up different components, which could be divided into three categories: direct, indirect and non-material damage. The methods described in literature generally apply to direct damage items and differ by the set of particular components.

The methods of estimating non-material damage are subject to most discussions. Up until now, the statistical value of life has relied on the estimate of «human capital». It has allowed to determine the effect of RTAs on the country’s aggregated GDP. The major shortcoming of this method is its underestimating the fact that society cares about its safety. A new method of estimating the value of statistical life has to be developed based on the willingness of individuals to pay for traffic risk mitigation. A new method is more theoretically justified in terms of identifying the optimal amount of public investment in the road traffic safety.

To fully estimate the damage caused by RTA it is necessary to take into account both direct and indirect costs (externalities) of RTAs. Having studied the international experience we suggest that two more components should be included. Firstly, the externalities referred to traffic difficulties for other vehicles. Secondly, externalities referred to the wasted working time by family members of the person injured or killed in an RTA. Both these components have so far not been included in the estimates of the aggregate costs associated with RTAs in Russia, and have been only sporadically used in estimations in other countries.
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