Alcohol and gasoline prices: Their impact on traffic fatalities and the economy

By Logan Dredske

Alcohol and gasoline prices are having unexpected impacts on traffic fatalities, as well as causing damage to economies. A study by Onyumbe Enumbe B. Lukongo, an economics professor at Southern University and A&M College in Louisiana, explored the relationship between per capita alcohol consumption and traffic fatalities, as well as the relationship between increased gasoline prices and traffic fatalities among young drivers (age 15–24). Analysis of Louisiana Crash Data Reports suggests a strong link between alcoholic beverage consumption and fatal crashes. The study also discovered increases in gasoline prices were strongly and negatively associated with the number of traffic fatalities among young drivers. Evidence for these relationships was also found in similar studies conducted by Alabama and Mississippi.

In all three studies, researchers theorize that increased gasoline prices lower youth driving demands, resulting in fewer young drivers on the roads and a reduction in fatal crashes. “A decrease in purchasing power consecutive to the increase in gasoline price is reasonably stronger on the young drivers because they have not accumulated enough wealth compared with adult drivers on average,” says Lukongo. Analyzing the impact of gasoline prices on young drivers may prove wise, as previous research that included all driving ages has shown less association between prices and the amount of travel. Alcohol was analyzed in this study because it has long been cited as “the leading cause of fatal, injury, and property damage-only crashes because it slows reaction times, impairs judgment, corrupts perception of accident risk, and induces drunk drivers to overestimate their perception of control over the vehicle and their self-control,” explains Lukongo. He suggests that increased prices relating to alcohol may deter usage and lower crash fatalities in the same way that higher gasoline prices deter young drivers.

Lukongo’s study also evaluates the economic costs to society as a result of fatal crashes. According to the National Highway Traffic Safety Administration, the value of societal harm from motor vehicle crashes, which includes both economic impacts and valuation for lost quality-of-life, was $836 billion in the U.S. for 2010. Data from the Louisiana Department of Transportation suggests the annual average total cost of crashes for the state is about $6.76 billion. In Louisiana, alcohol related crashes represent 43 percent of all fatal crashes, and youth fatal crashes represent 34 percent of all fatal crashes.

While policy makers in Louisiana have struggled to combat traffic fatalities, Lukongo suggests the next study be one that consists of laboratory experiments that evaluate the effectiveness of new driving education programs compared with tax policy proposals on alcohol and gasoline to change young drivers’ behaviors via a participatory approach.

Logan Dredske is a Project Assistant at SSTI.