We are all well aware of how costly drink-driving can be, with alcohol-fueled car crashes responsible for hundreds of deaths every week. However, a new analysis has shown that by dramatically reducing the number of alcohol-fueled car crashes that occur, the US has – on top of saving countless lives – boosted its economy by $20 billion.
The number of alcohol-fueled car crashes in the US fell by almost 50% from 1984-86 to 2010. In an analysis published in Injury Prevention, researchers set out to calculate the economic impact of car crashes on the economy, examining the gains and losses made as a result of this significant reduction.
While car crashes can lead to economic losses for some people, they can also benefit certain areas of society, as the study authors point out:
“In general, a reduction in traffic injuries benefits employers by reducing their costs, but the extra medical cost from injuries provides extra sales to the health care sector, which in turn, means more sales for industries that provide supplies and services to the health care sector.”
“Similarly, repair and replacement of damaged vehicles benefits the auto manufacturing and repair industries and their suppliers,” they add.
For their analysis, the researchers worked out the total costs incurred for medical treatment, disrupted productivity, property damage, emergency response, legal services and the investigation of crash sites.
By 2010, the number of car crashes involving alcohol had halved from the rate in 1984-86, in a reduction that was not associated with any significant change to alcohol sales according to the study authors.
Instead, the researchers calculated that the reduction increased economic output in 2010 by $20 billion, increased national income by $6.5 billion, created 215,000 new jobs and raised the gross domestic product (GDP) – the financial value of all goods and services produced within the US – by a total of $10 billion.
The increase in GDP was comprised of $5.6 billion in wages, $1.8 billion in tax revenues and $2.5 billion in profits – a total that made up 5% of the $200 billion overall increase in economic output.
For each of the 25.5 billion miles driven under the influence of alcohol in 2010, 12 jobs were lost, national economic output fell by $0.80 and GDP fell by $0.40, according to the researchers’ calculations.
The researchers acknowledge that their findings are limited by deriving from a restrictive model that only represents input-output relations and prices that existed in 2010 and does not allow for interactions between supply and demand.
A better model to use than this input-output model would be a computable general equilibrium model, but the authors state that this would be far more difficult to construct in comparison with simply adapting and applying an existing input-output model.
“The next major step forward in the USA, now implemented in more than 10 states, is thought to be mandatory installation of ignition interlocks in cars driven by people with impaired driving convictions and voluntary parental installation of interlocks in cars driven by adolescents,” the authors conclude.
By rolling out this legislation nationwide and improving the safety features of cars, the authors suggest that further improvements to GDP can be made.
According to the Centers for Disease Control and Prevention (CDC), almost 30 people in the US die in motor vehicle crashes involving a driver under the influence of alcohol – one death every 51 minutes.
Recently, Medical News Today reported on a study demonstrating that a rise in alcohol taxes in one state was followed by a significant reduction in alcohol-related fatal car crashes.