Friday, August 5, 2016

Gas Prices Down, Traffic Deaths Up in 2015

While cheaper gas is generally good for the economy and the average person's wallet, unfortunately it also seems to come at a fairly high cost:  more traffic fatalities.  The latest data suggest that was the case in 2015.  After stubbornly hovering between $3.50 and $4.00/gallon from 2011-2014, gas prices on average plummeted to around $2.00 from the second half of 2014 into 2015, and even dropped below $2.00 in early 2016--a seven-year low.  And traffic deaths apparently rose to a seven-year high in 2015, nearly 8% higher than the previous record-low reached in 2014.  Additionally, preliminary data for the first half of 2016 in several states also show that traffic deaths are likely to be the same or higher than they were in 2015.

None of this should really come as a surprise.   As we have noted in a previous post in 2010, it has been known for quite some time now that there is a significant inverse correlation between gas prices and traffic crashes, including fatal ones.  And the link is especially true for younger drivers.  Carefully controlled studies have found this to be true, suggesting a true causal relationship.  Contrary to popular opinion, the price elasticity of gasoline is not zero, or even close to zero, and it seems to rise dramatically when prices go above $3.00/gallon.  Longer-term elasticities are about twice as strong, suggesting the effect builds over time.

The effects on fatalities are not limited to reduced vehicle miles traveled; while that drops too, even controlling for this we can see a decrease in deaths with higher prices.   "Discretionary" driving declines the most when gas prices rise, and most fatalities occur from this type of driving.  Speeding and aggressive driving also decline in an effort to save fuel and money.  Thus, the price elasticity for gasoline demand actually understates the effect on fatalities.  And while non-alcohol related crashes may be more affected by changes in gas prices, alcohol-related ones would be affected as well.

By that logic, it seems that one of the best ways we can reduce traffic fatalities (both alcohol and non-alcohol) would be to raise the gas tax.  Of course, that would make a lot of people mad.  But if it saves even one life, it's worth it, right?  Isn't that what groups like MADD have said about things like the 21 drinking age?  Judging by the lack of enthusiasm about raising the gas tax, it appears that the pro-21 crowd doesn't practice what they preach.  Or maybe it's all about liberty for "just us," not all.

If we know higher gas prices save lives, not to mention the planet, what are we waiting for?

1 comment:

  1. The only reason why supporters of the discriminatory drinking age of 21 support that horrible law is because of bigotry. Young people are scapegoats in this country. Ageists do not have enough intelligence separated from their bigotry to realize that different factors, such as gasoline prices, have a more dramatic effect on traffic fatalities.