Project Description

Highway fatalities in UTRC Region II fell steadily from the 1970s through the 1990s, but levels have since rebounded slightly and have remained flat for more than a decade. The stagnation in progress on fatalities has been attributed by some analysts to the prevalence of light trucks, such as SUVs, on American roads. Because light trucks are taller, heavier, and more rigid than cars, they pose greater danger to the occupants of cars, as well as to pedestrians, bicyclists, and motorcyclists.

Despite increased fuel costs in recent years, large vehicles continue to make up a large percentage of the vehicle mix. One important factor in the ongoing light-truck trend may be the interrelationship among individual motor vehicle purchase decisions: specifically, a consumer’s choice between a large and small vehicle may be influenced by the current mix of large and small vehicles on the roads.

The proposed research project hypothesizes a “network effect,” whereby increases in the number of light trucks increase the consumer’s propensity to purchase a truck as a means of protection against heightened accident risks posed by the greater incidence of these vehicles on the roads. The project will measure this effect and examine its relationship to highway fatalities over the period 1997 through 2008. It will use an economic metric called the demand elasticity, which will allow for integration of network effects with effects on vehicle consumption from a host of influences, including prices and policy variables.

The principal investigator will manage a graduate student in collecting data to complete and extend a data set I have previously compiled of household- and state-year-level variables relevant to the analysis. He will employ the data in estimating a binary vehicle choice model (car versus light truck) and use the results to calculate measures of the network effect in each year. I will then estimate the network effect’s role in highway fatalities, its effect on potential public policies for addressing the vehicle mix, and its role in manufacturer incentives with respect to light-truck safety. The project will generate two deliverables: a final paper to be published in a top economics or public policy journal, and a research brief summarizing the results in non-technical language.