This is an annual update of the Social Cost of Road Crashes and Injuries published by the Ministry of Transport.
This update provides estimates of the average social costs per injury and per crash, after accounting for inflationary effects. It also accounts for any changes in the mix of crashes by area and severity, and the average number of injuries received in a crash.
Road crashes impose intangible, financial and economic costs to society. These costs include reduced quality of life; reduced productivity; medical and other resource costs. The Ministry of Transport updates the social cost of road crashes and injuries annually to allow comparison of the costs and benefits of any road safety actions in current dollars.
To ensure limited road safety resources are utilised efficiently, the cost of any safety interventions should be evaluated against the resulting benefit expressed in terms of social cost. When there are different solutions or options to a transport problem, social cost information also facilitates consistent comparison between solutions or options, especially when these solutions have different impacts on injury and crash risks.
Updated social cost estimates are incorporated into the NZ Transport Agency’s Crash Analysis System(external link) to facilitate consistent appraisal of the safety benefits from the prevention of road crashes and injuries.
Average social cost per injury and per crash
The updated value of statistical life (VOSL) is $4.14 million per fatality at June 2016 prices. Adding other social costs gives an updated average social cost per fatality of $4.18 million.
For non-fatal injuries, the updated average social cost is estimated at $439,100 per serious injury and $23,400 per minor injury.
These estimates do not include an adjustment for cases that do not have a traffic crash report but are recorded in hospital/ACC databases only.
As not all serious and minor injuries are reported to NZ Police a simple way to incorporate the costs associated with non-reported cases is to scale up the average social cost estimates to include the share of costs attributable to non-reported cases.
With such an adjustment, the social cost estimates increase to $776,000 per reported serious injury and $77,000 per reported minor injury.
These per-injury estimates are useful for assessing interventions that aim to reduce the number of injuries but not crashes. They are also useful for establishing the social cost of a specific crash considering the number of injuries sustained in that crash.
This report also provides estimates in per-crash terms to allow assessment of the potential safety benefits from interventions that aim to reduce the number of crashes.
The updated average social cost is estimated at $4.73 million per fatal crash, $504,500 per serious crash, $28,600 per minor crash (or $912,000 per reported serious crash and $99,000 per reported minor crash, after considering reporting rate adjustment).
Because each crash can result in multiple injuries of various severity, the average social cost per crash is higher than the average social cost per injury in all cases.
Total social cost of road injury crashes in 2015
The total social cost of motor vehicle injury crashes in 2015 is estimated at $3.79 billion, at June 2016 prices. Loss of life/ life quality due to permanent impairments accounted for approximately 91 per cent of the total social cost of injury crashes. Vehicle damage accounted for around five percent with other costs making up the remaining four percent.
There are also an estimated 220,460 non-injury crashes, valued at $0.66 billion. The total social cost of all motor vehicle crashes is estimated at $4.45 billion and covers all injuries recorded by NZ Police, hospitals and ACC.