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Economic evaluation of road safety measures

 

Scientific economic methods may help governments to reach decisions on how to improve road safety as efficiently as possible. SWOV recently made an inventory of these methods, at the request of the European Conference of Ministers of Transport (D-2000-16e).

 

The level of traffic safety in Europe has (been) improved considerably over the last decades. Nonetheless, most governments are still strongly committed to further improve the national traffic safety level. Many possible measures or packages of measures are available, while monetary resources are limited. The use of scientific economic methods may help decision makers to decide on

There are in principal two economic evaluation tools available to assess the efficiency of measures when governments decide to intervene in the field of traffic safety. They are social cost-benefit analysis (CBA) and cost-effectiveness analysis (CEA). The first method, CBA, can be used both for determining the optimum budget and for drawing up an optimal package of measures. The second method, CEA, is suited only for this latter purpose, given the budget. In addition to a CBA or a CEA, it is recommended to carry out two other analyses. Firstly, an analysis of redistribution of costs and benefits will show who will be affected by the advantages and disadvantages of the measures. Thus, aspects of justice can be considered in decision making. Secondly, a sensitivity analysis will show the robustness of the estimated effects.

To apply CBA, detailed information is needed for quantifying all the effects and assigning monetary value to each of them. This information is not always available, which makes the CBA method of limited use. Especially where ranking of projects within a given budget is concerned, CEA may be applied in combination with non-monetary methods, such as the goals achievement matrix (GAM) and the scorecard. The GAM is a multi-criteria method, relating effects of various alternatives to a number of stated social objectives. The scorecard method is a presentation tool used to facilitate the comparison of various alternatives by showing several aspects of these alternatives, supplied with ranking numbers.

Though CBA and CEA are accepted methods, further research is still needed to expand their possibilities. Priority should be given to:

Finally, it should be clear that the ultimate decision regarding traffic and road safety measures always falls to those who bear political and administrative responsibility. These decision may be based on other legitimate considerations than suggested by the outcome of economic evaluation studies.

SWOV Research Activities 16 - April 2001

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