Gasoline Prices and Motor Vehicle Fatalities

Fatal motor vehicle crashes per capita remained relatively stable over the 1990s, in spite of new traffic safety laws and vehicle innovations. One explanation for this stability is that the price of gasoline declined, which resulted in more vehicle miles traveled and potentially more fatalities. By using 1983-2000 monthly gasoline price and fatality panel data and fixed effects specifications, this study exploits within-state variation over time in gasoline prices and found that a 10cent decrease in gasoline prices increased motor vehicle fatalities by 2.3 percent over a 2-year period. The effect on higher-risk younger adults is more than twice as large. The secular decline in real gasoline prices over the 1990s may partially explain why motor vehicle fatalities per capita have not decreased even with the adoption of more stringent state policies. ? 2004 by the Association for Public Policy Analysis and Management.