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Do low gasoline prices cause more traffic fatalities in the 50 states of the USA? The importance of other factors

Shawkat Hammoudeh (Lebow College of Business, Drexel University, Philadelphia, Pennsylvania, USA) (Business School, Institute of Preparation for Administration and Management (IPAG), Paris, France)
Seong-Min Yoon (Department of Economics, Pusan National University, Busan, Republic of Korea)
Ali Kutan (Department of Economics and Finance, Southern Illinois University Carbondale, Carbondale, Illinois, USA)

Journal of Economic Studies

ISSN: 0144-3585

Article publication date: 2 August 2019

Abstract

Purpose

Motivated by the news media and a lack of comprehensive research on the USA, the purpose of this paper is to examine the relationship between changes in road fatalities and gasoline prices, per capita disposable personal income, alcohol consumption per adult, blood alcohol concentration (BAC) limits and gender.

Design/methodology/approach

This study employs both static and dynamic panel data models, making use of annual data over the 2000–2013 period collected from the 50 states of the USA and the consistent system GMM estimators of the parameters, to estimate the impact of these variables on fatalities per 100,000 persons and per 100,000 vehicles.

Findings

The results highlight the importance of gasoline prices in determining the level of road fatalities, underscoring that a 10 percent decrease in gasoline prices leads to a 248 increase in the total number of road fatalities, but with many more injuries. Increases in the female-to-total driver ratio have a greater significant positive impact on road fatalities where a 10 percent increase in this ratio increases road fatalities by 1,008 deaths. Increases in registered vehicles per capita also increase the number of fatalities. Other variables such as alcohol consumption per adult and BAC limits are not as important. Policy implications are also provided.

Research limitations/implications

The results of this study highlight the importance of gasoline prices in determining the number of road fatalities. This factor can be an effective policy measure by which policymakers can offset increases in fatalities due to further drastic declines in future gasoline prices. But the effects of the gasoline prices in determining the number of road fatalities are not as strong as the media would lead us to believe. The media ignores the impact of other factors on fatalities, which results in an overestimation of the impact of gasoline prices.

Originality/value

This study uses the panel data of 50 US states and the dynamic panel data model. In addition to gasoline price effects on the road fatalities, this study also considers other factors such as gender, gasoline taxes, per capita disposable personal income, per capita alcohol consumption, BAC limits and number of registered vehicles.

Keywords

Acknowledgements

There is no potential conflict of interest in the research. This work was supported by the Ministry of Education of the Republic of Korea and the National Research Foundation of Korea (NRF-2017S1A5B8057488).

Citation

Hammoudeh, S., Yoon, S.-M. and Kutan, A. (2019), "Do low gasoline prices cause more traffic fatalities in the 50 states of the USA? The importance of other factors", Journal of Economic Studies, Vol. 46 No. 3, pp. 777-795. https://doi.org/10.1108/JES-05-2018-0175

Publisher

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Emerald Publishing Limited

Copyright © 2019, Emerald Publishing Limited