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Traffic Congestion and Accident Externality: A Japan-U.S. Comparison

Listed author(s):
  • Saito Kuniyoshi

    ()

    (Tezukayama University)

  • Kato Takaaki

    ()

    (University of Kitakyushu)

  • Shimane Tetsuya

    ()

    (Tokyo Institute of Technology)

We measure the accident externality from driving in the spirit of Edlin and Karaca-Mandic (2006). We collect data that parallel those used in Edlin and Karaca-Mandic and apply their empirical method to gain further insights about the accident externality. Consistent with Edlin and Karaca-Mandic, we find larger external costs for higher density roads, although the sizes largely depend on the variable definition and the model specification. One intriguing result is that per-vehicle external costs are considerably smaller in Japan than those in the U.S. In Kyoto, for example, an additional driver increases accident costs for other drivers by $248--$802, while it is $1,725--$2,432 in California where the traffic density is approximately the same. However, on a per-mile basis, much closer externalities are obtained. This finding indicates that the large externality in high-density roads underscored in Edlin and Karaca-Mandic is partly attributed to the fact that U.S. drivers drive longer distances, comparatively speaking.

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Article provided by De Gruyter in its journal The B.E. Journal of Economic Analysis & Policy.

Volume (Year): 10 (2010)
Issue (Month): 1 (February)
Pages: 1-31

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Handle: RePEc:bpj:bejeap:v:10:y:2010:i:1:n:14
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References listed on IDEAS
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  1. Alma Cohen, 2005. "Asymmetric Information and Learning: Evidence from the Automobile Insurance Market," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 197-207, May.
  2. Smith, Eric & Wright, Randall, 1992. "Why Is Automobile Insurance in Philadelphia So Damn Expensive?," American Economic Review, American Economic Association, vol. 82(4), pages 756-772, September.
  3. Blackmon, B Glenn, Jr & Zeckhauser, Richard, 1991. "Mispriced Equity: Regulated Rates for Auto Insurance in Massachusetts," American Economic Review, American Economic Association, vol. 81(2), pages 65-69, May.
  4. Anne Gron, 1994. "Capacity Constraints and Cycles in Property-Casualty Insurance Markets," RAND Journal of Economics, The RAND Corporation, vol. 25(1), pages 110-127, Spring.
  5. W. Kip Viscusi & Joseph E. Aldy, 2003. "The Value of a Statistical Life: A Critical Review of Market Estimates throughout the World," NBER Working Papers 9487, National Bureau of Economic Research, Inc.
  6. Newbery, David M, 1988. "Road Damage Externalities and Road User Charges," Econometrica, Econometric Society, vol. 56(2), pages 295-316, March.
  7. repec:reg:rpubli:282 is not listed on IDEAS
  8. Gunnar Lindberg, 2001. "Traffic Insurance and Accident Externality Charges," Journal of Transport Economics and Policy, University of Bath, vol. 35(3), pages 399-416, September.
  9. Steven D. Levitt & Jack Porter, 2001. "How Dangerous Are Drinking Drivers?," Journal of Political Economy, University of Chicago Press, vol. 109(6), pages 1198-1237, December.
  10. Kuniyoshi Saito, 2006. "Testing for Asymmetric Information in the Automobile Insurance Market Under Rate Regulation," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 73(2), pages 335-356.
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