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Economic aspects of road accidents
submited on 24.07.2008 in category Political stability | Fiscal affairs | Monetary policy | Regulated markets | Privatisation | Macroeconomic developments
submited on 24.07.2008 in category Political stability | Fiscal affairs | Monetary policy | Regulated markets | Privatisation | Macroeconomic developments
Besides the purely human tragedy road accidents have yet another dimension – they are deadweight loss. In the Bulgarian society however the debate on economic consequences of road accidents seems completely understated. And these consequences are not to be underestimated.
Besides direct material costs expenses, induced by road accidents, could be grouped into two categories – productivity loss and/or economic opportunities and the necessity of engaging/reallocating institutional resources.
Certainly, the actual annual price of accidents is substantially larger than this sum, because we must add the unrealized product of the economically active victims of road accidents. Furthermore, the loss of labor ability following heavy wounding also leads to unfavorable economic consequences in the form of unrealized productivity (missed income), transfer payments, increased medical care payments. The deteriorating quality of life of the wounded reflects also on their behavior as consumers, which on the other side has its macroeconomic impact. The younger the victim is, the higher the economic loss.
Apart from the aforesaid expenses accidents cause other indirect costs, which are however difficult to estimate.
On a macro level road accidents are associated with increasing healthcare expenses, thus imposing additional burden on institutions financing healthcare services.
After all, expenses induced by road accidents, are paid by individuals and their families, as well as the entire society – via public financing of medical care. Efforts on their calculation, analysis and communication would considerably contribute toward allocating investments for improving the road infrastructure and taking precautionary measures for avoiding such accidents.
Besides direct material costs expenses, induced by road accidents, could be grouped into two categories – productivity loss and/or economic opportunities and the necessity of engaging/reallocating institutional resources.
Certainly, the actual annual price of accidents is substantially larger than this sum, because we must add the unrealized product of the economically active victims of road accidents. Furthermore, the loss of labor ability following heavy wounding also leads to unfavorable economic consequences in the form of unrealized productivity (missed income), transfer payments, increased medical care payments. The deteriorating quality of life of the wounded reflects also on their behavior as consumers, which on the other side has its macroeconomic impact. The younger the victim is, the higher the economic loss.
Apart from the aforesaid expenses accidents cause other indirect costs, which are however difficult to estimate.
On a macro level road accidents are associated with increasing healthcare expenses, thus imposing additional burden on institutions financing healthcare services.
After all, expenses induced by road accidents, are paid by individuals and their families, as well as the entire society – via public financing of medical care. Efforts on their calculation, analysis and communication would considerably contribute toward allocating investments for improving the road infrastructure and taking precautionary measures for avoiding such accidents.
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