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The Economic Effects of Road Safety Improvements: An Insurance Claims Analysis

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  • David J. Feber
  • Judith M. Feldmeier
  • Keith J. Crocker

Abstract

This article demonstrates the feasibility of exploiting insurance claims data to estimate the marginal benefits to society of highway infrastructure improvements. We construct a unique database linking claims expenditures for a major auto insurer in Michigan to infrastructure investments at 62 intersections in the City of Detroit, and conclude that the addition of a left‐turn lane, or left‐turn phase in the signal, decreases the insurer's average monthly claims costs at a representative intersection by $944 or $1,062, respectively. The evidence also indicates that these cost savings are a result of reductions in accident severity, rather than being a consequence of fewer accidents.

Suggested Citation

  • David J. Feber & Judith M. Feldmeier & Keith J. Crocker, 2003. "The Economic Effects of Road Safety Improvements: An Insurance Claims Analysis," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 70(4), pages 651-664, December.
    • Handle: RePEc:bla:jrinsu:v:70:y:2003:i:4:p:651-664
    DOI: 10.1046/j.0022-4367.2003.00069.x
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    References listed on IDEAS

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    Cited by:

    1. Hans Lueders & Micah Mumper, 2022. "Driving while unauthorized: Auto insurance remains unchanged when providing driver licenses to unauthorized immigrants in California," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 89(3), pages 669-696, September.
    2. Daniel Albalate, 2013. "The Road against Fatalities: Infrastructure Spending vs. Regulation?," ERSA conference papers ersa13p221, European Regional Science Association.
    3. Patricia Born & J. Bradley Karl & Charles Nyce, 2024. "Availability of the seat belt defense: Implications for auto liability insurance," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 91(1), pages 193-212, March.
    4. Kjell Hausken, 2013. "Exchange of goods while investing into production and safety," Operations Research and Decisions, Wroclaw University of Science and Technology, Faculty of Management, vol. 23(1), pages 29-35.

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