Cost of Production Loss for Long-term Disability due to Road Crashes
Abstract
Traffic accidents leave lifelong after-effects and if the victim is disabled, they produce a production loss due to the differential in income that will be lost. This average value is very divergent in European countries, although there is consensus on cost components and valuation methods. However, many countries have legally standardised financial compensation so that it is calculated objectively and equitably for all those affected. This paper sets out the procedure for standardising the lost production cost of incapacitated road accident victims. An actuarial methodology relating to known inputs (age and salary) is used to obtain economic compensation for lost productivity. General principles and hypotheses are provided, and cases that require particular valuation are located. The standard cost thus calculated allows a homogeneous, fair and equitable compensation for all those involved in similar circumstances.
References
Herbst AJ. The cost of medical and rehabilitation care for road accident victims at public hospitals. In: Report of the road accident fund commission. 2002. Pretoria: Ministry of Transport. Available from: http://docplayer.net/927556-Annexure-j-the-cost-of-medical-and-rehabilitation-care-for-road-accident-victims-at-public-hospitals.html [Accessed 18th January 2019].
Dalal K, Svanström L. Economic burden of disability adjusted life years (DALYs) of injuries. Health. 2015;7(4): 487-494. Available from: doi:10.4236/health.2015.74058 [Accessed 18th January 2019].
Dalal K, Janson B. Cost calculation and economic analysis of violence in low-income country: A model for India. African Safety Promotion: A Journal of Injury and Violence Prevention (ASP). 2007;5(1): 45-56.
EC-European Commission. Towards a European Road Safety Area: Policy Orientations on Road Safety 2011–2020. Brussels: European Commission; 2010. Available from: https://ec.europa.eu/transport/road_safety/sites/roadsafety/files/pdf/com_20072010_en.pdf [Accessed 18th January 2019].
World Bank. Global road safety facility strategic plan 2013–2020. Washington: World Bank/Global Road Safety Facility; 2013. Available from: http://siteresources.worldbank.org/INTTOPGLOROASAF/Resources/GRSF-strategic-plan-2013-2020.pdf [Accessed 18th January 2019].
WHO – World Health Organization. Global Status Report on Road Safety 2018. Geneva: World Health Organization; 2018. Available from: https://www.who.int/violence_injury_prevention/road_safety_status/2018/English-Summary-GSRRS2018.pdf [Accessed 18th September 2019].
Wijnen W, Weijermars W, Vanden Berghe W, Schoeters A, Bauer R, Carnis L, Elvik R, Theofilatos A, Filtness A, Reed S, Perez C, Martensen H. Crash cost estimates for European countries, Deliverable 3.2 of the H2020 project SafetyCube, 2017. Available from: https://dspace.lboro.ac.uk/dspace-jspui/bitstream/2134/24949/1/D32-CrashCostEstimates_Final.pdf [Accessed 18th January 2019].
Wijnen W, Weijermars W, Schoeters A, Van den Berghe W, Bauer R, Carnis L, Elvik R, Martensen H. An analysis of official road crash cost estimates in European countries. Safety science. 2019;113: 318-327. Available from: doi:10.1016/j.ssci.2018.12.004 [Accessed 30th September 2019].
Hills PJ, Jones-Lee MW. The costs of traffic accidents and evaluation of accident prevention in developing countries. In: PTRC Summer Annual Meeting, 13-16 July 1981, University of Warwick. London: PTRC Education and Research Services; 1981.
Hills PJ, Jones-Lee MW. The Role of Safety in Highway Investment Appraisal for Developing Countries. Accid Anal Prev. 1983;15: 355-369. Available from: https://www.sciencedirect.com/science/article/abs/pii/0001457583900143 [Accessed 18th January 2019].
Alfaro JL, Chapuis M, Fabre F. (Eds.) Socio-economic cost of road accidents: final report of action COST 313. Brussels: Commission of the European Community; 1994.
TRL – Transport Research Laboratory. Costing Road Accidents in Developing Countries. Overseas Road Note 10. Crowthorne: Transport Research Laboratory; 1995. Available from: https://trl.co.uk/reports/ORN10 [Accessed 18th January 2019].
BRS – Babtie Ross Silcock, TRL – Transport Research Laboratory. Guidelines for estimating the costs of road crashes in developing countries; 2003. Available from: https://www.gov.uk/dfid-research-outputs/guidelines-for-estimating-the-cost-of-road-crashes-in-developing-countries [Accessed 18th January 2019].
ADB – Asian Development Bank. Road Safety Audit for Road Projects: An Operational Tool Kit. Manila; 2003. Available from: https://www.irfnet.ch/files-upload/member_area-pdf-files/RS_WG/Annex/Road-Safety-Audit-for-Road-Projects.pdf [Accessed 18th January 2019].
World Bank. Valuation of accident reduction. Transport Note No. TRN-16. Washington: World Bank; 2005. Available from: https://openknowledge.worldbank.org/handle/10986/11799
ERSO. Cost-benefit analysis. European Road Safety Observatory; 2006 November 18. Available from: http://erso.swov.nl/knowledge/content/08_measures/cost_benefit_analysis.htm [Accessed 18th January 2019].
Bambach MR, Mitchell RJ. Estimating the human recovery cost of seriously injured road crash casualties. Accident Analysis and Prevention. 2015;85: 177-185. Available from: https://www.sciencedirect.com/science/article/pii/S0001457515300701 [Accessed 30th September 2019].
Wijnen W, Stipdonk H. Social costs of road crashes: an international analysis. Accid Anal Prev. 2016;94: 97-106. Available from: https://www.sciencedirect.com/science/article/pii/S0001457516301592
Baum H, Kranz T, Westerkamp U. Volkswirtschaftliche Kosten durch Straßenverkehrsunfälle in Deutschland. Heft M208. Bergisch Gladbach: Bundesanstalt für Straßenwesen; 2007.
Boardman AE, Greenberg DH, Vining AR, Weimer DL. Cost-benefit. Analysis. Concepts and Practice. Fourth edition. New Jersey: Pearson Prentice Hall; 2011.
BITRE. Costs of road crashes in Australia 2006. Canberra: Bureau of Infrastructure, Transport and Regional Economics, Research report 118, 2009. Available from: https://bitre.gov.au/publications/2010/files/report_118.pdf [Accessed 18th January 2019].
De Blaeij A, Florax RJGM, Rietveld P, Verhoef E. The value of statistical life in road safety: A meta-analysis. Accid Anal Prev. 2003;35(6): 973-986. Available from: https://www.sciencedirect.com/science/article/pii/S0001457502001057 [Accessed 18th January 2019].
Elvik R. An analysis of official economic valuations of traffic accident fatalities in 20 motorized countries. Accid Anal Prev. 1995;27(2): 237-347. Available from: https://www.sciencedirect.com/science/article/pii/000145759400060Y [Accessed 18th January 2019].
Trawén A, Maraste P, Persson U. International comparison of costs of a fatal casualty of road accidents in 1990 and 1999. Accid Anal Prev. 2002;34(3): 323-332. Available from: https://www.ncbi.nlm.nih.gov/pubmed/
[Accessed 18th January 2019].
Wijnen W, Wesemann P, de Blaeij A. Valuation of road safety effects in cost-benefit analysis. Eval Program Plann. 2009;32: 326-331. Available from: https://www.sciencedirect.com/science/article/pii/S0149718909000597 [Accessed 18th January 2019].
Schoeters A, Wijnen W, Carnis L, Weijermars W, Elvik R, Johanssen H, Vanden Berghe W, Filtness A, Daniels S. Costs related to serious injuries. Deliverable 7.3 of the H2020 project SafetyCube; 2017. Available from: https://dspace.lboro.ac.uk/dspace-jspui/bitstream/2134/25111/1/SafetyCube%20Deliverable%207.3%20-%20Costs%20related%20to%20serious%20road%20injuries.pdf [Accessed 18th January 2019].
Freeman AM. The Measurement of Environment and Resource Values: Theory and Methods. Second edition. Washington: Resources for the future; 2003.
Ainy E, Soori H, Ganjali M, Le H, Baghfalaki T. Estimating Cost of Road Traffic Injuries in Iran Using Willingness to Pay (WTP) Method. PLoS ONE. 2014;9(12): e112721. Available from: doi:10.1371/journal.pone.0112721 [Accessed 18th January 2019].
EU – Eropean Union. Compensation of victims of cross-border road traffic accidents in the EU. Comparison of national practices, analysis of problems and evaluation of options for improving the position of cross-border victims; 2009. Available from: http://ec.europa.eu/civiljustice/news/docs/study_compensation_road_victims_en.pdf [Accessed 18th January 2019].
Lucas P. Valoración y reparación del daño corporal en Bélgica [Assessment and reparation of bodily harm in Belgium]. In: Borobia Fernandez C. (ed.) Valoración del daño corporal. Legislación, metodología y prueba pericial médica. Barcelona: Ed. Masson; 2006. p. 471-479.
Markesinis B, Coester M, Alpa G, Ullstein A. Compensation for personal injury in English, German and Italian Law. Cambridge: Cambridge University Press; 2005.
Rogers WVH. Damages for non-pecuniary loss in a comparative perspective. New York: Springer; 2001.
Lewis R, Mcnabb R, Robinson H, Wass V. Loss of earnings following personal injury. Do the Courts adequately compensate injured parties? Econ J. 2003;113: 568-584. Available from: https://www.jstor.org/stable/3590254?seq=1#page_scan_tab_contents [Accessed 18th January 2019].
Butt Z, Haberman S, Verrall R, Wass V. Calculating compensation for loss of future earnings: Estimating and using work life expectancy. J R Stat Soc Ser A Stat Soc. 2008;171(4): 763-805. Available from: http://openaccess.city.ac.uk/4041/ [Accessed 18th January 2019].
Law 35/2015, de 22 de septiembre, de reforma del sistema para la valoración de los daños y perjuicios causados a las personas en accidentes de circulación [Reform of the system for the valuation of damages caused to persons in traffic accidents]. BOE 228, de 23 de septiembre, 84473-84979. Available from: https://www.boe.es/diario_boe/txt.php?id=BOE-A-2015-10197 [Accessed 18th January 2019].
Sáez De Jáuregui L. Baremo de autos. Bases técnicas actuariales en el nuevo sistema. Hipótesis económico-financieras y biométricas del sistema de valoración [Cars´ Scale. Actuarial technical bases in the new system. Economic-financial and biometric hypotheses of the valuation system]. Jornada de UNESPA sobre el Baremo de Autos. 29 de octubre. Madrid, 2014.
Copyright (c) 2020 J. Iñaki De la Peña, Miguel A. Peña-Cerezo, Olga Fotinopoulou
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).
