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This dissertation adds to the current understanding of the socioeconomic determinants of traffic fatality rates by examining the variation in road deaths across countries and over time. Chapter two investigates the relationship between road safety and economic development within an Environmental Kuznets Curve framework. Reduced-form models of fatality risk as a function of per capita income are estimated using panel data for over 80 countries. The results confirm an inverted U-shaped relationship with income, with traffic fatality risk (fatalities per population) beginning to decline at incomes similar to those found for several environmental externalities. The turning point is driven by the rate of decline in fatalities per vehicle as income rises, since motorization rates (vehicles per population), while increasing with income at a decreasing rate, never decline with economic growth. This suggests that road safety improvements accompanying income growth depend on policies that reduce fatalities per vehicle rather than on reducing motorization.Projections suggest that the global road death toll will grow by 66% between 2000 and 2020 if historic trends continue. This number, however, reflects divergent rates of change in different parts of the world.Chapter three focuses on factors underlying the decline in fatalities per distance traveled, i.e., the downward sloping part of the road safety Kuznets curve.Formal models of traffic fatalities are developed for vehicle occupants and pedestrians. Reduced-form approximations to these models are estimated using panel data for over 30 high-income countries over 1964-2002. Estimates suggest that demographic changes and road building contributed to declines in both vehicle occupant and non-occupant fatality rates. In addition, increases in the size of the vehicle fleet, as predicted by theory, have increased occupant deaths while decreasing pedestrian deaths per distance driven.Improvements in medical care also played a role in reducing both fatality rates. The results do not offer evidence of a significant increase in demand for risky driving in response to newer, safer vehicles or seatbelt usage. The extent to which alcohol and increases in the elderly population have detrimental effects on fatality rates is found to be twice as large for pedestrians as for vehicle occupants.

We examine the effects of urban form and public transit supply on the commute mode choices and annual vehicle miles traveled (VMTs) of households living in 114 urban areas in 1990. The probability of driving to work is lower the higher are population centrality and rail miles supplied and the lower is road density. Population centrality, jobs-housing balance, city shape, and road density have a significant effect on annual household VMTs. Although individual elasticities are small absolute values (≤0.10), moving sample households from a city with the characteristics of Atlanta to a city with the characteristics of Boston reduces annual VMTs by 25%. © 2005 President and Fellows of Harvard College and the Massachusetts Institute of Technology.

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Title IV of the 1990 Clean Air Act Amendments (CAAA) established a market for transferable sulfur dioxide (SO 2 ) emission allowances among electric utilities. This market offers firms facing high marginal abatement costs the opportunity to purchase the right to emit SO 2 from firms with lower costs, and is expected to yield cost savings compared to a command and control approach to environmental regulation. This paper uses econometrically estimated marginal abatement cost functions for power plants affected by Title IV of the CAAA to evaluate the performance of the SO 2 allowance market. Specifically, we investigate whether the much-heralded fall in the cost of abating SO 2 , compared to original estimates, can be attributed to allowance trading. We demonstrate that, for plants using low-sulfur coal to reduce SO 2 emissions, technical changes and the fall in low-sulfur coal prices have lowered marginal abatement cost curves by over 50% since 1985. The flexibility to take advantage of these changes is the main source of cost reductions, rather than trading per se. In the long run, allowance trading may achieve cost savings of $700-$800 million per year compared to an "enlightened" command and control program characterized by a uniform emission rate standard. The cost savings would be twice as great if the alternative to trading were forced scrubbing. However, a comparison of potential cost savings in 1995 and 1996 with actual emissions costs suggests that most trading gains were unrealized in the first two years of the program.

Benefit-cost analysis can play an important role in legislative and regulatory policy debates on protecting and improving health, safety, and the natural environment. Although formal benefit-cost analysis should not be viewed as either necessary or sufficient for designing sensible public policy, it can provide an exceptionally useful framework for consistently organizing disparate information, and in this way, it can greatly improve the process and, hence, the outcome of policy analysis. If properly done, benefit-cost analysis can be of great help to agencies participating in the development of environmental, health, and safety regulations, and it can likewise be useful in evaluating agency decision-making and in shaping statutes.