Dollars for lives: The effect of highway capital investments on traffic fatalities

Nguyen-Hoang, P.; Yeung, R.


Introduction: This study examines the effect of highway capital investments on highway fatalities. Methods: We used state-level data from the 48 contiguous states in the United States from 1968 through 2010 to estimate the effects on highway fatalities of capital expenditures and highway capital stock. We estimated these effects by controlling for a set of control variables together with state and year dummy variables and state-specific linear time trends. Results: We found that capital expenditures and capital stock had significant and negative effects on highway fatalities. Conclusion: States faced with declines in gas tax revenues have already cut back drastically on spending on roads including on maintenance and capital outlay. If this trend continues, it may undermine traffic safety. Practical application: While states and local governments are currently fiscally strained, it is important for them to continue investments in roadways to enhance traffic safety and, more significantly, to save lives.