Valuing the Prevention of Road Accidents in Belgium

Abstract

In a recent international comparison of the social costs of road accidents, Trawén et al. (2003) noted that cost data are not available for Belgium and, by consequence, play no part in Belgian policy‐making. The purpose of the present paper is, therefore, to value the costs per casualty type and per accident in Belgium. Empirical data are provided on human and economic production losses as well as on direct accident costs such as medical costs, hospital visiting costs, accelerated funeral costs, property damage, administrative costs of insurance companies, litigation costs, police and fire department costs, and congestion costs. In Belgium the marginal unit value of preventing a road casualty is estimated at €2 004 799 per fatal casualty, €725 512 per seriously injured and €20 943 per slightly injured victim. The unit cost per accident amounts to €2 355 763, €850 033, €34 944 and €2571 for fatal, serious, slight injury and property damage only accidents, respectively. These results are consistent with valuations reported in other high‐income countries. Finally, the total costs of road accidents in 2002 are valued at €7.2 billion (2004 prices), or 2.6% of gross domestic product.

Acknowledgements

The authors are grateful to the Antwerp Traffic Police Department, the Christelijke Mutualiteiten (CM), the Nationaal Instituut voor Statistiek (NIS), and a major Belgian insurance company for providing invaluable data. They are much indebted to Paul Wesemann at the SWOV (the Netherlands) for clarifying the long tradition in valuing costs and losses of road accidents. Finally, they thank the Flemish Policy Research Center on Traffic Safety for financial support. Any errors remain the authors’ own.

Notes

1. In 2001, Belgium ranked 11th of 15 countries with 13.76 fatalities per billion passenger‐km. The average fatality rate in the European Union was 11.80. The safest countries report fatality rates around 6.00 (European Commission, 2005).

2. Values are expressed in euros for 2004. The original values were updated by correcting for growth in GDP per capita, inflation and exchange rates. These three elements were taken from the OECD (http://www.oecd.org).

3. Between 2003 and 2008 the Flemish government will each year spend 100 million to eradicate the 800 most dangerous locations in Flanders (http://www.wegen.vlaanderen.be/wegen/gevaarlijkepunten/). Another goal is to have automated speed and red slight cameras on 25% of the intersections in Flanders (http://www.mobielvlaanderen.be/flitspalen/kaarten.php).

4. For a standard methodological classification of road accident costs, see, for example, Hopkin and Simpson (1995), Miller (1997) and Alfaro et al. (1994).

5. The European average value of a statistical life is based on Beattie et al. (1998), Carthy et al. (1999) and Nellthorp et al. (2001).

6. The relative value of serious and slight injuries is deduced from Jones‐Lee et al. (1995), Trawén et al. (1999) and Persson et al. (2000); and from official values for Finland, Sweden and the UK.

7. In Belgium, the average age of entry in the labour market is 22 years (Steunpunt Werkgelegenheid, Arbeid en Vorming, 2003, p. 19). The average retirement age in Belgium is 58 years (Elchardus and Cohen, 2003, p. 17).

8. No significant differences were found when controlling for data for 1999, 2000 or 2001.

9. Based on survey data provided to the authors by the NIS.

10. A labourer without a degree or with a degree of primary education earns 85% of the average labour income. Workers with a higher education degree earn 172% of the average labour income (NIS, 2000; Ministerie van de Vlaamse Gemeenschap, 2003a).

11. Maraste et al. (2003, p. 148) argue that the incidence approach is more useful than the prevalence approach. In the latter approach, healthcare costs caused by road accidents during a specific year are estimated irrespective of the timing of the road injury. Long‐term effects for severe injuries may be substantial. In an eight‐year follow‐up study, Persson (2004, appendix 8, p. 29) estimated that costs relating to care, special transport and special forms of housing between the second and eighth year after the accident amount to an additional 75% on top of the costs incurred during the first year. The present data are based on all treatment and rehabilitation costs that are attributed to the road accident. Though treatment and rehabilitation costs are captured in the subsequent years after the accident, some underestimation is likely since it was not always clear whether the costs were correctly assigned to the accident.

12. The CBFA, created as a result of the integration of the Insurance Supervisory Authority (ISA) into the Banking and Finance Commission (BFC), has been since 1 January 2004 the single supervisory authority for the Belgian financial sector. For more information, see http://www.cbfa.be/nl/vo/stat/sta.asp

13. For salary figures, see http://www.jobpol.be

14. One international study puts forward an average cost of €15 000 and €5000 per fatal and serious injury accident (ICF Consulting, 2003, p. 12).

15. On the relationship between speed and emissions in Belgium, see De Ceuster and De Schrijver (2002).

16. Most of the international differences in willingness‐to‐pay estimates can be attributed to the difference in income level (Persson, 1996). The adjustment from the initial UNITE estimate reflecting this income level difference results in a Belgian estimate of €1.67 million. This value is then further adjusted to account for growth in real GDP/capita (applying an income elasticity of 1, which is also suggested in the UNITE project). Subsequently, the calculated value is corrected for inflation to the year 2002. After that this value is discounted to 2004, which results in a willingness‐to‐pay value of €1 997 273. From this value, the average production losses (€695 732; Table 8) are subtracted. The outcome adds up to a value of human losses of €1 301 541 for a fatal casualty. The values of human losses for injured casualties are calculated from the overall (€1 997 273) willingness‐to‐pay value corresponding to a fatal casualty.

17. This information was made available by the Nationaal Instituut voor Statistiek (NIS) (http://statbel.fgov.be/figures/d321_nl.asp#4).

18. See Section Accident Costs.

19. In Belgium, the average age of a road accident victim is 40 years. The weighted average life expectancy is 80 years.

20. Obviously, estimations of public litigation costs would be even more accurate if information existed on the time spent per court case.

21. The non‐injury costs of accident amount to 6516 per injury accident and 2571 per PDO accident.

22. The distribution of casualties per injury accident is based on data for Flanders (2001). In a fatal accident, 1.0658 fatal, 0.2805 seriously and 0.4310 slightly injured casualties are involved; in a serious injury accident, 1.1499 seriously and 0.4417 slightly injured casualties are involved; and, finally, in a slight injury accident, 1.3574 slightly injured casualties are involved (detailed data are based on NIS, 2004).

23. Per injury accident, there were 0.0313 fatal, 0.1886 seriously injured and 1.1876 slightly injured casualties (NIS, 2004, p. 7).

24. For hourly labour costs, see http://epp.eurostat.ec.europa.eu/portal/page?_pageid=1996,45323734&_dad=portal&_schema=PORTAL&screen=welcomeref&open=/C/C4/C43&language=en&product=Yearlies_new_population&root_Yearlies_new_population&scrollto=346