Economic cost of human fatalities due to road traffic accidents in Sri Lanka: an estimation based on the human capital approach

Abstract

Though a key factor behind the economic growth of a nation, transportation is associated with negative externalities that directly affect the economic performance of a country: road traffic accidents being one such negative externality. An increase in the number of accidents and related fatalities poses a socio-economic burden to developed and developing countries alike. Hence, quantifying the impact of road traffic fatalities on the national economy has become a popular topic amongst researchers in transportation. The present study was an attempt to quantify the economic burden of premature mortalities associated with road traffic accidents in Sri Lanka, using descriptive analytical tools and employing the Human Capital Approach, upon estimating the Years of Life Lost, an integral component of Disability-adjusted Life Years. The outcomes revealed that road traffic accidents have been a growing threat in Sri Lanka, and that, despite the decreasing number of accidents, fatalities associated with road traffic accidents have increased: this reflects a trend of increasing accident severity. The results also allowed for an estimation of the human capital-related economic cost of fatalities due to road traffic accidents. This was found to be nearly 0.25% of the GDP of the corresponding years: exceeding the capital expenditure of the Government in the health sector and more than half that in the education sector.

Keywords

• road traffic accidents
• fatalities
• disability
• years of life lost
• human capital approach of economic valuation
• sri lanka