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Social Cost of Road Crashes

26 October 2022

Report for the Bureau of Infrastructure and Transport Research Economics. Australia

Road crashes impose large human and financial costs on society, and substantial investments are made in infrastructure and safety programs to reduce road trauma. However losses are all toooften simply set out in numbers killed or injured. The cost of road crashes is important in the safety debate in Australia and elsewhere and the economic cost of road crashes informs road safety policy and road infrastructure investment decisions, particularly values for a fatality, injury and a fatal crash, which are key inputs into policy development and benefit-cost analysis for road safety programs and infrastructure programs.

The Bureau of Infrastructure and Transport Research Economics (BITRE) engaged the Australian National University (ANU) to undertake this update of the economic cost of road crashes. The objective of this project was to go beyond the scope of the last BITRE estimate (BITRE 2009) by including financial analysis to detail the financial burden of road crashes, and who bears that burden, and aid in the answering of key policy questions.

The social cost of road crashes was estimated to have a range of between $22.2 and $30.3 billion, with a base case estimate of $27.0 billion annually between the years 2016-2020 derived using a Hybrid Human Capital approach.

• The $27.0 billion estimate was an increase of 12 per cent in real terms compared to 2006, the year of the last Australian costing study (Bureau of Transport Economics 2009).

• The total social cost of road crashes increases by $600 million or 2 per cent to $27.6 billion if a Willingness to Pay Approach is used instead of a hybrid human capital approach.

• Fatal crashes cost society an estimated $3.5 billion, injury crashes an estimated $11.8 billion and property damage only crashes an estimated $11.7 billion. • Workplace and household losses and pain, grief and suffering costs (human losses) were 32 per cent of the cost of road crashes

The full report is available here.