The Economic Effects of Road Safety Improvements

An Insurance Claims Analysis

David J. Feber, Judith M. Feldmeier, Keith John Crocker

Research output: Contribution to journalReview article

3 Citations (Scopus)

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.

Original languageEnglish (US)
Pages (from-to)651-664
Number of pages14
JournalJournal of Risk and Insurance
Volume70
Issue number4
DOIs
StatePublished - Jan 1 2003

Fingerprint

Accidents
Insurer
Economic effect
Road safety
Insurance
Costs
Expenditure
Infrastructure investment
Data base
Cost savings
Severity

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance
  • Economics and Econometrics

Cite this

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The Economic Effects of Road Safety Improvements : An Insurance Claims Analysis. / Feber, David J.; Feldmeier, Judith M.; Crocker, Keith John.

In: Journal of Risk and Insurance, Vol. 70, No. 4, 01.01.2003, p. 651-664.

Research output: Contribution to journalReview article

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AB - 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.

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