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Accident Externality of Driving: Evidence from the London Congestion Charge

Author

Listed:
  • Cheng Keat Tang

    (Nanyang Technological University)

  • Jos van Ommeren

    (Vrije Universiteit Amsterdam)

Abstract

This paper estimates the marginal accident externality of driving in Central London by exploiting variation in traffic flow induced by the London Congestion Charge Zone using an instrumental variable approach. The charge attributed to a 9.4% reduction in traffic flow, which resulted in a less than proportional 6.0% and 7.6% decrease in accidents and slight injuries, and a 6.5% increase in serious injuries/fatalities. Our preferred estimates indicate that the accident, slight injuries, and serious injuries/fatalities rate elasticities with respect to traffic flow are -0.36, -0.19 and -1.65 respectively. These estimates imply that the marginal external benefit of road safety from an additional kilometre driven is approximately £ 0.16. The marginal accident externality is positive, as the marginal driver along congested roads decreases the risk and severity of traffic collisions for other road users by slowing others down and increasing awareness.

Suggested Citation

  • Cheng Keat Tang & Jos van Ommeren, 2020. "Accident Externality of Driving: Evidence from the London Congestion Charge," Tinbergen Institute Discussion Papers 20-080/VIII, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20200080
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    References listed on IDEAS

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    Cited by:

    1. Santiago Sánchez González & Felipe Bedoya-Maya & Agustina Calatayud, 2021. "Understanding the Effect of Traffic Congestion on Accidents Using Big Data," Sustainability, MDPI, vol. 13(13), pages 1-19, July.

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    More about this item

    Keywords

    Accidents; Injuries; Fatalities; Congestion Charge; Externalities;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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