Cost of Crashes vs. Cost of Congestion
By Robert W. Poole, Jr.
Published by Reason Foundation in Surface Transportation Innovations, Issue 55, May 2008
You probably saw at least one article in March with some variant of the headline, “Automobile Crashes Cost Society Much More than Congestion” (The Urban Transportation Monitor, March 21, 2008). These articles reported somewhat uncritically on a study carried out for the Automobile Association of America by Cambridge Systematics and Prof. Michael D. Meyer. What the study did, competently, was estimate the total annual cost of traffic accidents (deaths, injuries, property damage, etc.) using Federal Highway Administration data. It then compared this total with annual congestion costs as estimated by the Texas Transportation Institute. Since TTI does this only for the largest 85 urban areas, the AAA study used crash costs for these same urban areas in the comparison. The headline numbers were $164.2 billion in crash costs vs. $67.2 billion in congestion costs.
So far, so straightforward. But what does this comparison leave out? Only a month before the above headline about the AAA study appeared on page 2 of The Urban Transportation Monitor, that newsletter had a front-page headline reading “Economists Find Toll of Congestion Is Often Underestimated” (Feb. 8, 2008). That story focused on recent work by Glen Weisbrod and Stephen Fitzroy of Economic Development Research Group in Boston. They point out that most measures of congestion cost, such as TTI’s, include only drivers’ lost time and wasted fuel due to being stuck in traffic. Their work—including case studies in Vancouver, Chicago, and Portland (OR)—finds much larger costs that congestion imposes on business and a region’s economic productivity. An excellent introduction to their work is “Defining the Range of Urban Congestion Impacts on Freight and their Consequences for Business Activity,” an August 2007 working paper that you can find at www.edrgroup.com. I also highly recommend their Portland and Vancouver case studies, which I’ve written about in previous newsletters.
While Weisbrod and Fitzroy have not developed an alternative to the TTI nationwide congestion cost estimate, the chief economist of the U.S. DOT has. Jack Wells estimates that congestion costs smaller (non-TTI) cities another $12-13 billion per year, leads to about $13 billion in safety and environmental costs, and adds about $79 billion in productivity losses and goods-movement inefficiencies, for a grand total of $168 billion. That is 2.5 times the widely known TTI figure, and is slightly more than the crash costs total estimated in the AAA report.
It’s good to have a plausible estimate of the high cost of crashes on the highways. But in point of fact, the full cost impact of congestion is equally high. Both need to be targeted for major reductions.