Fact sheet

Road crash costs

Summary

The social costs of road crashes in the Netherlands in 2018 are estimated at 17 billion euro (between € 15.8 and € 18.6 billion euro), equivalent to more than 2% of the gross domestic product (GDP). This is significantly higher than other traffic-related social costs such as traffic congestion (€ 3.3 to € 4.3 billion) and environmental damage (€ 7 billion).

The costs amount to about € 2.8 million per road death and more than € 300,000 per serious road injury. More than one third of the costs is attributable to serious road injuries, while the share of road deaths is relatively low (an estimated 11%). The other costs (about half of them) are the result of road crashes with less severe outcomes.

More than half of the total costs are human costs, while the damage to vehicles is also relatively high (about a quarter of the total costs). Other cost items are medical costs, loss of production, settlement costs and congestion costs.

In the Netherlands, the cost of road crashes is higher than in most other European countries. In Europe, the costs range from 0.4% to 4.1% of the GDP. The differences are mainly caused by differences in cost valuation methods.

Information about the costs of road crashes is used in, for example, the preparation and evaluation of road safety policy and in cost-benefit analyses of road safety measures.

Facts

What are the costs of road crashes for society?

The social costs of road crashes in 2018 are estimated at 17 billion euro (€ 15.8 to € 18.6 billion) (€ 15,8 tot € 18,6 miljard [1]).

This is equivalent to more than 2% of the gross domestic product. The costs are about € 2.8 million per road death and more than € 300,000 per serious road injury.

More than a third of the total costs of road crashes (about 37%) is attributable to serious road injuries, while the share attributable to road deaths is relatively low (an estimated 11%). Slightly injured casualties (treated in the A&E department of a hospital) have a cost share of about 22% and those with other injuries 6%. About a quarter of the cost is attributable to crashes with property damage only, see Figure 1.

The costs are both 'hard' economic costs – such as medical costs and damage to vehicles – and human costs. These intangible costs involve loss of life years and quality of life. Almost half the total costs are human costs (also see the question What types of road crash costs do we distinguish?).

Figure 1. Proportions of deaths, serious/slight/other injuries and property damage only crashes of the total road crash costs (2018; PDO = property damage only). Source KiM [1]

 

The data for 2018 are a simple update of the costs in 2009, the most recent year for which the costs were examined in detail [2]. To estimate the costs in 2018, the costs in 2009 (€ 12.5 billion) were adapted to the development of the number of casualties and to inflation. The costs of PDO crashes were, apart from inflation, indexed on the basis of mobility development, since reliable figures about the number of PDO crashes were not available. This simple update implies that the 2018 cost estimate is only a rough estimate. Thus, general cost increases, such as increases in medical costs and vehicle repair, were not included in the calculations. Moreover, basic data for most cost items are (sometimes quite) outdated [3].

In the most recent update by KiM and W2Economics, the human costs of slightly injured casualties were added [1] also see the question What types of road crash costs do we distinguish?). This addition increased the costs by € 3 billion compared to previous estimates in which these costs had not  been included.  

The bandwidth of the total costs (€ 15.8 to € 18.6 billion) was based on the 95% confidence interval of the value of a statistical life (from which the human costs are inferred (see the question: What types of road crash costs do we distinguish?)) and from the number of slightly injured casualties. The number of slightly injured casualties was determined by Consumer Safety Institute VeiligheidNL on the basis of the Injury Surveillance System [4].

The data only include costs that are due to road crashes. In 2007, costs made to prevent crashes were approximately € 2.3 billion to € 3.1 billion [5]. More recent estimates of these costs are not available.

How did the costs develop in recent years?

Figure 2. Development of the costs of road crashes (billion euros, 2018 prices; PDO = property damage only). Source: KiM [1].

 

In 2018, the costs of road crashes are approximately 5% higher than in 2010 when the costs were € 16.3 billion (2018 prices, adjusted for inflation; see Figure 2). Two thirds of the increased costs are attributable to a higher number of injured casualties in 2018. The 2018 breakdown of costs by injury severity, however, hardly differs from the 2010 breakdown of costs. The estimates for 2010 and 2018 are fairly rough indications, because after 2009 no extensive study was made of the costs of road crashes. The costs in 2010 and 2018 were estimated in a simple way by adapting the 2009 costs to the development of the number of casualties and to mobility developments (also see the question What are the costs of road crashes for society?).

 

What types of road crash costs do we distinguish?

Figure 3. Estimated proportions of the total costs of road crashes in 2018 for the various cost items.[i]. Source: KiM [1].

 

The costs of road crashes can be subdivided into six cost items [2] [6] [7]:

Medical costs

Medical costs are the result of the medical treatment of casualties, for example costs for hospital, rehabilitation and medicines. In the Netherlands, costs for people who come to visit in hospital and (early) funeral costs are also included in medical costs.

Production loss

Loss of production consists of costs of the casualties’ temporary or permanent inability to work and the entire loss of production of road deaths. Some countries also include loss of unpaid production, such as housekeeping and voluntary work, costs for employers to recruit and train replacement staff, and cost of vocational rehabilitation. However, these costs are not included in the Netherlands.

Human costs

Human costs for casualties and their relatives and friends are costs in the form of suffering, pain, sorrow and loss of quality of life and joy of life. Human costs are related to road deaths as well as to serious and slightly injured casualties. Also see the question How do we define human costs of road crashes?

Property damage

Property damage includes damage to vehicles, cargo, roads and road furniture, and to personal possessions. Vehicle damage is always by far the largest cost item in this category [8] and in the Netherlands these are the only costs included in the calculation (passenger cars, delivery vehicles, trucks and motorcycles).

Settlement costs

Settlement costs relate to deployment of police and fire brigade in the event of crashes, administrative costs of insurers and legal costs. Legal costs include costs of detection, prosecution, trial and punishment of those who cause a crash and costs for legal aid.

Other costs

In the Netherlands, other costs only include costs of congestion on account of crashes. In some other countries, other costs also include the cost of vehicle unavailability, such as the cost of replacement transport. More than half of the total costs are human costs (Figure 3). Property damage costs are also relatively high (about a quarter of the total costs). Other cost items are relatively low.

 

[i] This is a fairly rough indication of the distribution of the costs in 2018 which was based on the costs in 2009 and which was adapted to the number of casualties and to inflation.

How do we define human costs of road crashes?

Human costs of road crashes are costs in the form of suffering, pain, sorrow and loss of quality of life and the joy of life for casualties and the ones closest to them. The intangible damage related to road deaths can be expressed in terms of money in a number of steps. The Netherlands and most other European countries do this on the basis of the amount that people are willing to pay for a decrease in the fatality risk in traffic (willingness to pay, WTP) [7]. This is usually determined with a questionnaire study ('stated preferences'). This can be used to derive the so-called ‘value of a statistical life’ (VOSL). The VOSL is the basis for the calculation of the human costs of road deaths. The immaterial damage of non-fatal injury is in its turn derived from this.

In 2001, the VOSL in the Netherlands was estimated at € 2.2 million plus or minus € 300,000 [9] [10]. The share of ‘immaterial damages for fatal injury’ comes down to almost € 1.8 billion plus or minus € 300,000. The other part of the VOSL concerns consumption loss. Taking into account inflation rate, the VOSL in 2018 was € 2.8 million, of which an estimated € 2.2 million was for immaterial damage. This is probably an underestimate, because the VOSL will also have risen due to the general increase in economic prosperity in this period (separate from inflation). In the Netherlands, the VOSL is in a similar range as that of other prosperous countries that use a WTP method, with the exception of the United States in which the VOSL is significantly higher [8].

The VOSL and human costs do not refer to the valuation for a specific individual, but to the valuation for a decrease in the risk of a fatal crash. After all, most people do not wish to die at any price. The 'willingness to pay' is based on people making a trade-off between risk and money. Every day people take decisions in which they make such a trade-off, consciously or unconsciously. Think of the choice of food, choosing driving speed, the choice of whether or not to have a smoke detector, or the decision whether or not to work out.

Much less is known about the human costs of non-fatal injury than about the human costs of fatal injury; studies have only been carried out in Great Britain [11], Sweden [12] and Belgium [13]. On the basis of the British study, the immaterial damage per serious road injury in the Netherlands has been estimated at 12% of the immaterial damage of a road death [14]. For slight injuries, the immaterial damage is estimated at 1% of the VOSL, based on the studies in the three countries [1]. These values correspond to the standard numbers that are often used at the European level (13%, respectively 1% of the VOSL) [15] [16].

How are the costs calculated?

Three methods are used to establish the various cost items [6] [7] (also see the question: What types of road crash costs do we distinguish?):

  1. The ‘Restitution costs method’ is used to determine the medical costs, the property damage and the settlement costs. This method uses the costs of deployment of people and resources required to (as much as possible) restore the damage for casualties and their relatives. Examples are the costs of medical personnel, the costs of vehicle repair companies and the costs of emergency services.
  2. The ‘Human capital method’ is used to determine production loss. This method determines the value of the production that would have been made by the casualties if they were not injured or deceased. Production loss actually includes both paid production and unpaid production (for example, housekeeping and voluntary work). However, in the Netherlands and most other countries only paid production is included in the calculations.
  3. The ‘Willingness to pay method’ is used to calculate the human costs. This method usually uses a questionnaire study (‘stated preferences’) to determine the amount that people are willing to pay for a certain reduction of the crash risk. Also see the question How do we define the human costs of road crashes?

Large quantities of data are required to determine all the costs using these methods. Per cost item the necessary data include [2] [14] :

  • Medical costs: number of days that a casualty has spent in hospital, the average cost per day of hospital or nursing home care and the number of ambulance trips per year. Most medical costs are determined using VeiligheidNL’s burden of injury model, which uses data from medical records and cost estimations from various studies.
  • Production loss: duration of absenteeism and disability, remaining number of life years and production per person. Among the data used are, for example, disability insurance data and economic statistics of for instance Statistics Netherlands and the Netherlands Bureau for Economic Policy Analysis.
  • Human costs: results of a survey about the amount people are willing to pay for a reduced crash risk.
  • Property damage: insurance data on vehicle damage and estimates of damage unknown to insurers due to it not being insured or claimed.
  • Settlement costs: time spent by the police on road crashes, number of times the fire department turns out for road crashes, budgets of fire department and police, financial data of insurers, and number of criminal cases following a road traffic crash. The data are supplied by, among others, Statistics Netherlands and the Ministry of Security and Justice.
  • Congestion costs: number of traffic jams on account of crashes, congestion intensity thereof (length of a traffic jam times the duration of the congestion) and economic valuation of travel time.
How do costs in the Netherlands compare to the costs in other countries?

Costs as a percentage of the gross domestic product

With 2.2% of the gross domestic product (GDP) the Netherlands is among the countries with relatively high costs of road crashes, while we occupy 11th place from the road safety perspective (number of deaths per inhabitant) [17].In Europe, the costs range from 0.4% to 4.1% of the GDP (Figure 4). The costs in the Netherlands are also higher than in Australia and New Zealand (both 1.7% of the GDP), but much lower than in the United States (6.0% of the GDP) [8].The costs in seven Asian low-and middle-income countries range from 1.1% to 2.9% of the GDP [8].

Figure 4. Costs of road crashes, as a percentage of the GDP in 31 European countries [7].

 

Rather than by differences in the level of road safety, the differences in total costs between countries are mainly explained by differences in the way the costs are calculated, in particular the human costs [7]. Also, there are many countries that, unlike the Netherlands, do not take into account underregistration of casualties and crashes, or do not include property damage only crashes in their cost estimates. Furthermore, countries differ in the cost items they include. As has been advocated by international road safety organisations such as IRTAD, FERSI and ETSC [3]. greater uniformity in the methods used is therefore required for proper comparison of the costs of road crashes in different countries. When the cost estimates in European countries are corrected for methodological shortcomings, the costs of road crashes in Europe are estimated at a minimum of 3% of the GDP [15].

Costs of a road death and a serious road injury

Also the costs per road death are higher in the Netherlands than in most other countries. In Europe, these costs range from € 0.7 million to € 3.1 million (see Figure 5)[i]. In Australia the costs per road death are lower than in the Netherlands, but in the United States they are much higher [8].Differences are mainly explained by differences in the method of estimating the human costs: in countries that use a 'willingness to pay’ method, among which the Netherlands, these costs are higher [7] [8] [18] [19].

In most European countries the costs of a serious road injury[ii] are between 10% and 20% of the costs of a road death. With 11 % of the costs of a road death, the costs of a serious road injury are relatively low in the Netherlands (Figure 6). In absolute amounts, there are large differences between countries in the costs per serious road injury; in 2015 these range from € 28,000 to € 959,000.

Figure 5. Costs of a road death in 31 European countries (million euro, price level 2015) [7].

 

Figure 6. Costs of a serious road injury as a percentage of the costs of a road death in 31 European countries [7].

 


[i] Due to inflation and a correction for differences in purchasing power between countries, the costs per fatality in the Netherlands are lower in Figure 5 than the data provided by KiM.

[ii]These are the costs of a serious road injury such as defined in each country; these definitions differ between countries.

How do the costs compare with other traffic-related costs?

The road crash costs of approximately € 17 billion (€ 15.8 to € 18.6 billion) are significantly higher than other social costs related to traffic: the costs of congestion are estimated at € 3.3 to € 4.3 billion (main road network only) [1] and the costs of environmental damage due to road traffic at € 7.0 billion (source: KiM). The costs of environmental damage do have broad fluctuation margins (€ 5.5 to € 17.4 billion).

Figure 7. Estimated social costs related to road traffic in 2018 (KiM )[1]

Congestion costs are not just the costs of direct loss of travel time, but also the costs of unreliability of travel times, adaptation of travel behaviour to congestion (detours, other times of travel etc.) and indirect costs, such as effects on public transport. Environmental costs are the costs resulting from air pollutant emissions, CO2 emissions and noise pollution, such as costs of health damage and damage to buildings [20]. Particularly the costs of CO2 emissions are uncertain and are the cause of broad fluctuation margins.

 

Why is it important to determine the costs of traffic crashes?

First, the costs of road crashes provide insight into the extent of road safety as a social problem, and particularly in the socio-economic impact of road crashes. They can for example be seen as an indicator for the results of road safety policy, of course in addition to numbers of casualties and other indicators [21]. Information about the costs of road crashes is also commonly used in the preparation and evaluation of road safety policies, both at a national level, for example in the Strategic Plan Road Safety 2008-2020 [22],and at the international level, for example in the Policy Orientations on Road Safety of the European Commission [23]. Furthermore, cost information makes it possible to compare costs of road crashes to costs in other policy sectors, in traffic and transport (environmental damage, congestion; also see the question How do the costs compare to other traffic-related costs?), as well as in other sectors, such as environmental policy, health care or other safety policy sectors. Furthermore, information about the social costs gives insight into opportunities for cost savings and can be used to prioritize policy objectives. Finally, also on the level of costs of road crashes making international comparisons is useful, although this requires that the methods used to calculate the costs are harmonized to a greater extent. Also see the question How do costs in the Netherlands compare to costs in other countries?.

Secondly, information about the costs of road crashes is used in cost-benefit analyses (also see the question What are social cost-benefit analyses?). These use the costs per casualty or crash to express the road safety effect of policy measures as a monetary value. This value is then balanced against the cost of the measures.

What are social cost-benefit analyses?

A social cost-benefit analysis (CBA) determines the economic and other welfare effects of an investment, for example, of an investment in road safety improvement. This means that a CBA answers the question whether the benefits of an investment outweigh the costs from a social point of view. Whenever possible, a CBA expresses the effects in money. This is not just the case for road safety effects, but also for effects on, for example, the environment and mobility. In this way a CBA makes it possible to judge the social return of an investment.

An overview of the social costs and benefits may be used to prioritise separate measures or packages of measures. In addition, a CBA is used to strike a balance between investments in different policy areas. Such choices have to be made when developing policy plans, determining the state budget, and prioritising or phasing investment options. A CBA helps summarise a great deal of information in a rational framework. In the Netherlands, CBAs are often used when deciding about (major) infrastructure projects and other spatial planning investments. Sometimes, CBAs are mandatory, as is the case with investments in the context of the Dutch Multi-Year Programme for Infrastructure, Spatial Planning and Transport (MIRT). In order to safeguard quality and uniformity of CBAs, manuals and methodologies have been developed to carry out CBAs, among which a general guideline for CBAs [24]. This also describes how the consequences of measures on road safety can be taken into account.

CBAs of road safety measures often show that the benefits of measures exceed the costs. This is partly because of the high costs of road crashes, and , therefore, the resulting high savings (benefits). Early in 2000, a number of planning agencies [25] concluded that investments in road safety are cost-effective. In the Netherlands for example, the cost-benefit ratio of investments in Sustainable Safety measures during the period 1998-2007 has been calculated to be nearly 1:4 [26] [27]. International overviews of CBAs [28] [29] also indicate that road safety measures generally have higher benefits than costs.

Publications and sources

Below you will find the list of references that are used in this fact sheet. All sources used can be consulted or retrieved via our Library portal. Here you can also find more literature on this subject.

[1]. KiM (2019). Mobiliteitsbeeld 2019. Kennisinstituut voor Mobiliteitsbeleid (KiM), Den Haag.

[2]. Wit, M. de & Methorst, R. (2012). Kosten verkeersongevallen in Nederland; Ontwikkelingen 2003-2009. Directoraat-Generaal Rijkswaterstaat, Dienst Verkeer en Scheepvaart DVS, Delft.

[3]. Wijnen, W., Schroten, A. & ’t Hoen, M. (2016). Costs of road crashes in the Netherlands; an assessment of scenarios for making new cost estimates. CE Delft / W2Economics, Delft.

[4]. Toet, H., Blatter, B., Panneman, M., Wijnstok, N., et al. (2019). Letsel Informatie Systeem (LIS). Methoden en toepassingen. VeiligheidNL, Amsterdam.

[5]. Wijnen, W. & Stroeker, N.E. (2009). Uitgaven aan verkeersveiligheid; Een schatting voor 2007. [Expenditure for road safety; An estimate for 2007]. R-2009-17 [Summary in English]. SWOV, Leidschendam.

[6]. Kasnatscheew, A., Heinl, F., Schoenebeck, S., Lerner, M., et al. (2016). Review of European accident cost calculation methods – With regard to vulnerable road users. Deliverable 5.1 of H2020 project InDeV. European Commission, Brussels

[7]. Wijnen, W., Weijermars, W., Schoeters, A., Berghe, W. van den, et al. (2019). An analysis of official road crash cost estimates in European countries. In: Safety Science, vol. 113, p. 318-327.

[8]. Wijnen, W. & Stipdonk, H. (2016). Social costs of road crashes: An international analysis. In: Accident Analysis & Prevention, vol. 94, p. 97-106.

[9]. Blaeij, A.T. de (2003). The value of a statistical life in road safety; Stated preference methodologies and empirical estimates for the Netherlands. Tinbergen Institute Research Series. Vrije Universiteit Amsterdam, Amsterdam.

[10]. Wesemann, P., Blaeij, A.T. de & Rietveld, P. (2005). De waardering van bespaarde verkeersdoden; Covernota bij 'The value of a statistical life in road safety'. [The valuation of casualties saved; Memorandum with the PhD thesis 'The value of a statistical life in road safety']. R-2005-4 [Summary in English]. SWOV, Leidschendam.

[11]. Hopkin, J.M. & O’Reilly, D.M. (1993). Revaluation of the cost of road accident casualties: 1992 revision. TRL Research Report 378. Transport Research Laboratory, Crowthorne.

[12]. Persson, U. (2004). Valuing reductions in the risk of traffic accidents based on empirical studies in Sweden.  Proefschrift Lund Institute of Technology, Lund.

[13]. Brabander, B. de (2006). Valuing the reduced risk of road accidents. Empirical estimates for Flanders based on stated preference methods.  Thesis Hasselt University, Diepenbeek, Belgium.

[14]. Wijnen, W. (2012). Bouwstenen voor berekening van de kosten van verkeersongevallen 2003-2009; Materiële en immateriële kosten en kosten van afhandeling. [Costs of traffic crashes 2003-2009. Property damage, human losses, and settlement costs]. D-2012-4 [Summary in English]. SWOV, Leidschendam.

[15]. Wijnen, W., Weijermars, W., Berghe, W. van den, Schoeters, A., et al. (2017). Crash cost estimates for European countries. Deliverable 3.2 of the H2020 project SafetyCube.

[16]. Bickel, P., Friedrich, R., Burgess, A., Fagiani, P., et al. (2006). Proposal for harmonised guidelines. Deliverable 5 of the EU project HEATCO. Universität Stuttgart, Institute of Energy Economics and the Rational Use of Energy (IER), Stuttgart.

[17]. Adminaite, D., Helpern, C. & Jost, G. (2019). Ranking EU progress on road safety; 13th Road Safety Performance Index Report. European Transport Safety Council ETSC, Brussels.

[18]. Trawén, A., Maraste, P. & Persson, U. (2002). International comparison of costs of a fatal casualty of road accidents in 1990 and 1999. In: Accident Analysis & Prevention, vol. 34, nr. 3, p. 323-332.

[19]. Elvik, R. (1995). An analysis of official economic valuations of traffic accident fatalities in 20 motorized countries. In: Accident Analysis & Prevention, vol. 27, nr. 2, p. 237-247.

[20]. Essen, H. van, Wijngaarden, L. van, Schroten, A., Sutter, D., et al. (2019). Handbook on the external costs of transport; Version 2019. CE Delft, Delft.

[21]. Bliss, T. & Breene, J. (2009). Country guidelines for the conduct of road safety management capacity reviews and the specification of lead agency reforms, investment strategies and safe system projects. World Bank, Washington.

[22]. Ministerie van IenW, Ministerie van JenV, IPO, VNG, et al. (2018). Veilig van deur tot deur. Het Strategisch Plan Verkeersveiligheid 2030: Een gezamenlijke visie op aanpak verkeersveiligheidsbeleid. Ministerie van IenW, het Ministerie van JenV, het Interprovinciaal overleg, de Vereniging van Nederlandse Gemeenten, de Vervoerregio Amsterdam en de Metropoolregio Rotterdam Den Haag, Den Haag.

[23]. European Commission (2019). EU Road Safety Policy Framework 2021-2030 - Next steps towards "Vision Zero". European Commission, Brussels.

[24]. Romijn, G. & Renes, G. (2013). Algemene leidraad voor maatschappelijkekosten-batenanalyse. CBP/PBL, Den Haag.

[25]. CPB, RIVM, RPB & SCP (2002). Selectief investeren; ICES-maatregelen tegen het licht. CPB en Koninklijke De Swart, Den Haag.

[26]. Weijermars, W. & Wegman, F. (2011). Ten years of sustainable safety in The Netherlands: An assessment. In: Transportation Research Record vol. No. 2213, p. 1-8.

[27]. Weijermars, W.A.M. & Schagen, I.N.L.G. van (2009). Tien jaar Duurzaam Veilig. Verkeersveiligheidsbalans 1998-2007.[Ten years of Sustainable Safety. Road safety assessment 1998-2007] . R-2009-14 [Summary in English]. SWOV, Leidschendam.

[28]. CEDR (2008). Best Practice for Cost-Effective Road Safety Infrastructure Investments. Summary Report. Conference of European Road Directors, Brussels.

[29]. ROSEBUD (2006). Examples of assessed road safety measures - a short handbook. European Commission, Brussels.

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Updated

24 Mar 2020