Estimation of Economic Cost of Road Traffic Accidents in Twin Cities, Pakistan

Abstract

Road Traffic Accidents in developing countries are a serious concern in terms of safety and economy. World health organization states that the Road Traffic Accidents (RTAs) cause about 1.2 million deaths and around 20-30 million injuries annually. Such accidents share a considerable amount of overall life, resource, monetary and productivity losses. It has thus become essential to work on the economic costs of RTAs, which might lead to such consequences, to aid the policy makers, economists and the state government to efficiently select the cost-effective countermeasure for the safety of road users. There is a growing demand for the roadways from the last decade and increasing damages resulting from the road traffic accidents. The economic and social costs of this research can be utilized in framing cost-effective safety measures and policies. This research aims to evaluate the overall costs of Road Traffic Accidents in the city of Rawalpindi/Islamabad, Pakistan by using the Human Capital Approach to estimate the monetary amount that the Road Traffic Accidents have cost to the cities in the year 2016. The research has categorized the costs into 5 main components namely: medical costs, property damage costs, loss output, human loss and administrative costs. A total of 10187 incidents have been recorded in the cities involving 12573 victims and 18136 vehicles. Results suggested that a total of 2.183 billion pkr/- has been incurred by the State of Pakistan. The breakdown of costs is as follows: Medical costs include costs incurred while treatment of injuries. They cost about pkr 93,151,235 and comprise of 4.266521% of the total cost. Property damage costs include vehicular and property damage repair. They cost about pkr 214,840,463 and comprise of 9.840141% of the total cost. Loss output include damage to the economy of market while absence of victim from workplace. They cost about pkr 1,316,000,000 and comprise of 60.27554% of the total cost. Human costs cover total life loss. They cost about pkr 473,584,345 and comprise of 21.69115% of the total cost. Administrative costs include costs incurred by the administration (emergency service, police service, insurance service). They cost about pkr 85,730,725 and comprise of 3.926646% of the total cost.