Gas Prices and Traffic Safety

My colleague and co-author Guangqing Chi on Gas Prices and Traffic Safety on video:

Some of the work he is describing is published in these papers:

One interesting policy implication is that as gas prices go up, average insurance rates should go down, since risk is dropping. Whether it goes down by cohort, or just overall as the shares of various cohorts traveling changes, is unclear.

Linklist: February 20, 2012

David Brin sends me to: Future Day:

“This is a brand new holiday — the first Future Day will be March 1, 2012. Let us all work together to get Future Day off to an incredible start.”

[Shouldn’t this always be held March 1, Next Year ? At any rate, I hope this holiday is purple. We already have green, orange, red, yellow, and blue holidays].

Calculated Risk: Gasoline Prices: $4.50 per gallon by Memorial Day?:

“High gasoline prices is one reason American are driving less. Brad Plumer at the WaPo discusses a few other reasons: Driving, gas prices and the end of retail

Americans have cut way back on driving in recent years. Total vehicle-miles traveled has stagnated since 2007. One big question is whether this is a temporary blip due to the downturn — unemployed people, after all, don’t commute — or evidence of a long-term structural shift.
Theories for a structural shift generally involve demographics: America’s swelling ranks of retirees don’t drive as much, while kids these days prefer Facebook to motoring around with friends. But there’s another possible factor: the torrid growth of online shopping. Phil Izzo has the numbers, which are striking.”

JW sends me to Technology Review: Self-Driving Tech Veers into Mid-Range Cars – Technology Review:

“Fully autonomous self-driving cars are still far from the market, but a wide range of features—including sensor systems that warn of lane departures and imminent crashes, and can even apply the brakes if you don’t—are rapidly showing up in midmarket cars.”

Silicon Filter: OpenXC: Ford Launches an Open-Source Platform for In-Car Connectivity and Apps :

“Here is the general philosophy behind OpenXC:
What if the user-facing hardware and software was independent from any one vehicle, and could be purchased and installed by consumers as an aftermarket add-on? What if the infotainment hardware was more modular and user-upgradable, and perhaps most importantly, transferable from one vehicle to another?”

[So long as the add-on to vehicle interface technology is static, fine. But what is the likelihood of that?]

PCMag: Nevada Approves Rules for Self-Driving Cars:

“Nevada has become the first state in the United States to approve self-driving cars, a necessary step for Google’s vision to become a reality.
In a statement, the Nevada Department of Motor Vehicles said that its Legislative Commission today approved regulations allowing for the operation of self-driving vehicles on the state’s roadways. Nevada’s rules are the next step in a process began last June, when the state passed a bill   that required its DMV to draft the rules.
Autonomous test vehicles will display a red license plate, Nevada officials said. If and when the technology is approved for public use, the cars will carry a green license plate. Nevada’s standard licese plates are bluish-gray, with most of the license plate representing mountains fading into a yellowish sky.”

Gasoline Price Effects on Traffic Safety in Urban and Rural Areas: Evidence from Minnesota, 1998–2007

Gasoline Price and Traffic Safety in Minnesota
Gasoline Price and Traffic Safety in Minnesota

Working paper:


A large literature base has found that economic factors have important effects on traffic crashes. A small but growing branch of literature also examines the role that gasoline prices play in the occurrence of traffic crashes. However, no studies have investigated the possible difference of these effects between urban and rural areas. In this study, we used the monthly traffic crash data from 1998–2007 at the county level in Minnesota to investigate the possibly different effects gasoline prices may have on traffic crashes in urban versus rural areas. The results indicate significant difference of gasoline price effects on total crashes in urban versus rural areas. Gasoline prices also significantly affect the frequency of injury crashes in both urban and rural areas; however, the difference is not significant. Gasoline prices have no significant effects on the frequency of fatal crashes in urban and rural areas. Traffic volume plays a bigger role on the incidence of injury and fatal crashes. The results concerning the differences between urban and rural areas have important policy implications for traffic safety planners and decision makers

Study: High Gas Prices Lead to Fewer Auto Accidents

Our studies are also picked up by the Insurance Journal … Study: High Gas Prices Lead to Fewer Auto Accidents: “”

As gasoline prices reach $4 a gallon throughout the nation, pain at the pump seems to have at least one silver lining for drivers and insurers.
The rising cost of gas also drives a decline in all traffic accidents, including drunk-driving crashes, according to a new study by Mississippi State’s Social Science Research Center.
Researcher Guangqing Chi, an assistant professor of sociology at the university, published his findings in the Journal of Safety Research and Accident Analysis and Prevention.
Chi examined a range of factors related to driving-related accidents in the state, including age, gender and race. The study analyzed total traffic crashes between April 2004 and December 2008, comparing gas prices to traffic safety statistics.
“The results suggest that prices have both short-term and intermediate-term effects on reducing traffic crashes,” he reports in the journal article.
Among other points, the research also shows gas prices having a short-term impact on crashes involving younger drivers and intermediate-term impact related to older drivers and men.
Chi said short-term impact refers to immediate effects, for example how a current month’s average gasoline prices affect the same month’s traffic crashes. Intermediate-term impact refers to effects over a one-year subsequent time period.
While previous research linked traffic-related fatalities to gas price fluctuations, limited research has shown the effects of prices on all traffic accidents. No research previously examined the link between drunk-driving crashes and gas prices, Chi observed.
His research also found significant connections between gas prices and a reduced frequency of alcohol-related crashes.
Other researchers contributing to the study include SSRC director Arthur Cosby; David Levinson, an associate professor of civil engineering at the University of Minnesota; and Mohammed Quddus, a senior lecturer in transportation studies at the University of Loughborough, United Kingdom.

Yet another externality of gasoline consumption

At  Modeled Behavior Yet another externality of gasoline consumption Adam Ozimek picks up our piece on gas prices and drunk driving and runs with it …

In addition to global warming, congestion, geopolitical costs, oil spills, and health problems like asthma and allergies, we now have another externality to gasoline consumption to justify a pigouvian tax: drunk driving. A new study by Chi et al (6 co-authors!) uses data from Mississippi to show that lower gas prices are related to drunk driving related accidents. The authors claim the study is the first to examine this relationship, and is important because from a theoretical perspective the relationship could be positive or negative.
The ways that gas could inversely relate to drunk driving are obvious: lower prices make it cheaper to drive and give people more disposable income, which means it’s less expensive go out drinking and driving and people have more money to do so. In addition, the marginal cost of driving a to a farther away bar decreases. Also, higher gas prices may cause people to shift to different modes of transportation, like walking or taking the bus, which (freakonomists aside) are less likely to result in drunk driving accident.
A positive relationship is less obvious, but could result if gas prices increases enough that the negative wealth effect (more expensive gas makes you poorer) is severe enough that it creates economic hardship, which can lead people to drink more.On the face of it, the positive relationship seems much less likely than the negative relationship, and this is what the empirical evidence found in this study suggests. The chart below shows the indexed values of drunk driving accidents and gas prices.

These results increase the growing gap between the nominal price of gas and the true cost of it, and strengthen the case for a pigouvian tax… not that externalities, efficiency, or empirical realities seem to matter much in the political debate on this issue.
A caveat though: these results should not be taken as dispositive but rather suggestive. The empirical analysis is pretty simple, does not get into a really serious attempt to examine causality, and has some fairly serious omissions. For instance, the authors do not control for weather in their analysis. They mention that it would be difficult to aggregate to the monthly level, but I think average temperature would probably suffice. Second, and relatedly, they do not control for seasonality. This is pretty important in a time-series context where you are very likely to see both drunk driving and gas prices increase in the summer and decrease in the winter. Finally, and this is a more minor econometric point, they choose between a poisson and negative binomial regression models by selecting the one with the higher log-likelihood, which I do not believe is a sufficient means to determine whether there is enough overdispersion in the data to warrant the use of negative binomial over poisson. More importantly, they don’t tell us whether the use of negative binomial, or OLS for that matter, affects the results compared to poisson, which would have taken 30 seconds to determine and would tell us something about the robustness of their econometric results. Given that the relationship between prices and accidents disappears for males when the analysis is partitioned by gender, it is not hard to believe that the results are potentially not robust.
All that said, the authors do argue that nobody has empirically examined this issue before, and the results are highly theoretically believable. In fact, I find the theory alone strong enough to conclude that a relationship is likely. At the very least when thinking about gas prices we should consider that drunk driving may be yet another cost of low gas prices, and this study should definitely be enough to prompt more research into this.

Driving’s Back Up … Or Is It?

From Brookings: Driving’s Back Up … Or Is It?
More support for peak travel (at least peak per capita travel).

Recent data from the Federal Highway Administration shows that driving patterns, measured by Vehicle Miles Traveled (VMT), are back to their highest level since 2007. That’s true. Unlike Western Europe and parts of Asia, the U.S. is a growing country. We’ve added over 29 million people since 2000, and 7 million people since 2007 alone. So one would expect driving to increase, too. What is interesting to note is that combining the growth in VMT and population shows a per capita driving rate that is not growing and, in fact, is pretty much at the same level as it was in 2000. See the chart below.

State Roads to Economic Recovery: Policies, Pavements, and Partnerships – Brookings Institution

Brookings Institution will be hosting an event on State Roads to Economic Recovery: Policies, Pavements, and Partnerships – Brookings Institution.
Event Information
When Friday, February 25, 2011 9:00 AM to 1:00 PM
Where Falk Auditorium
The Brookings Institution
1775 Massachusetts Ave., NW
Washington, DC

As the U.S. economy begins a slow climb to recovery, state and local governments are still reeling from the impact of the Great Recession. Revenues have plunged while the demand for key state and local services has soared. Meanwhile, unemployment remains stubbornly high.
On Friday, February 25, The Hamilton Project and the Metropolitan Policy Program at Brookings will host a forum on state strategies that can help close budget deficits while also growing state economies and creating much-needed jobs. Brookings Vice President Bruce Katz will moderate a panel of policy experts and state leaders, including former Pennsylvania Governor Ed Rendell, now a senior fellow at Brookings, and Michael Finney, CEO of the Michigan Economic Development Corporation. The panel will discuss a range of fiscally responsible policy ideas to build the foundation for the next economy.
A second panel of economic experts, moderated by Hamilton Project Director Michael Greenstone, will discuss three new policy proposals to help state and local governments invest more efficiently in infrastructure to promote their long-term economic competitiveness. These papers provide a new approach to arranging public private partnerships to create greater public value and reduce risks; a reorganization of our national highway infrastructure priorities; and the establishment of a not-for-profit, independent advisory firm that would help reduce borrowing costs for municipalities and increase returns for investors. Former Under Secretary for the U.S. Department of Transportation Tyler Duvall will serve as a discussant for the proposals.

I will not be at the event in person, though I will be there in spirit and online, while Matt Kahn presents our joint paper, which is almost ready to be released.
(This is probably the most important work ever to be written on highway finance by two authors who walk to work).