Short-term and long-term effects of GDP on traffic deaths in 18 OECD countries, 1960–2011

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Abstract

Background

Research suggests that increases in gross domestic product (GDP) lead to increases in traffic deaths plausibly due to the increased road traffic induced by an expanding economy. However, there also seems to exist a long-term effect of economic growth that is manifested in improved traffic safety and reduced rates of traffic deaths. Previous studies focus on either the short-term, procyclical effect, or the long-term, protective effect. The aim of the present study is to estimate the short-term and long-term effects jointly in order to assess the net impact of GDP on traffic mortality.

Methods

We extracted traffic death rates for the period 1960–2011 from the WHO Mortality Database for 18 OECD countries. Data on GDP/capita were obtained from the Maddison Project. We performed error correction modelling to estimate the short-term and long-term effects of GDP on the traffic death rates.

Results

The estimates from the error correction modelling for the entire study period suggested that a one-unit increase (US$1000) in GDP/capita yields an instantaneous short-term increase in the traffic death rate by 0.58 (p<0.001), and a long-term decrease equal to −1.59 (p<0.001). However, period-specific analyses revealed a structural break implying that the procyclical effect outweighs the protective effect in the period prior to 1976, whereas the reverse is true for the period 1976–2011.

Conclusions

An increase in GDP leads to an immediate increase in traffic deaths. However, after the mid-1970s this short-term effect is more than outweighed by a markedly stronger protective long-term effect, whereas the reverse is true for the period before the mid-1970s.

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