The Economic Impact of Inter-Urban Motor-Vehicle Crashes in Iran

Traffic crashes are a major cause of human fatalities and their burden, both in social, quality of life and economic terms, create considerable emotional and real costs to society. The severities of these losses are much greater among “developing nations” being several times higher than those in “developed societies”. Inter-urban vehicle crashes due to high populated cities in developing regions cause high losses. In developing countries these accidents are mostly caused by insufficient and low standard transport infrastructure and equipment, their poor maintenance and law enforcement shortcomings. Based on increasing dialogue among the world community, there have been signs of increasing interest about developing countries’ road safety issues among researchers in developed nations. As there has been little information available with regard to Iran, this paper will be a contribution to the overall understanding of accident costing in developing countries. Inter-urban traffic fatalities in both developed and developing societies are on the top of the list of human-being losses and these accidents are the most important cause of death in the age categories of 15-25. Recent research indicates that in Iran 25 per cent of fatalities amongst this age group are caused by road crash. Transparent road safety funding decisions require an explicit value to be placed on life to allow projects with a range of outcomes in terms of saved lives and reduced injuries to be compared. As the value of lives lost and also the indirect elements of costs are the most important and at the same time the most complicated elements of road crashes’ costs, different methods have been proposed for their calculation. The methods described as “willingness to pay”, “life insurance” and “implicit evaluations” are frequently employed in developed countries for the calculation of these complicated elements. But these methods are not suitable for developing nations because almost all of them are based on the evaluation of the price of safety in the eyes of people living in a specific society. In developing nations the evaluation of safety prices among people is different “before” and “after” the crash. However in many situations, in these societies, people do not address the right value of safety “before” the incident. Thus, they bargain the safety of themselves and others with cheap prices. Therefore the best method for the calculation of the costs of road crashes in developing countries is not the “willingness to pay” method. The other two methods (gross income and court verdict) will be discussed and used in this study. The “Gross income method” and the subject of “potential years of lives lost” [PYYL] will be also considered.The comprehensive cost of Iran inter-urban motor-vehicle crashes was estimated almost equal to 2.12 billion US dollars in 2003. Comprehensive cost adds the value of lost quality of life to economic costs. This paper estimates costs by injury severity for eighteen severity classification systems. It also estimates the functional capacity loss and probability of permanent work related disability resulting nonfatal injury. In this paper theories for estimation of the cost of road crashes are discussed. Different methods and their relevance to different societies are presented. Then the elements of the cost of road crashes are introduced and estimated for Iran as an example of the developing world. Using only highway costs in safety decision making inappropriately favors mobility over safety. Comprehensive costs are one appropriate choice. Another acceptable choice is to use years of functional capacity loss plus direct costs to perform cost-effectiveness analysis.