The Economic Impact of Road Accidents: The Case of Sri Lanka

The purpose of this study is to disclose accident-related indices and investigate the extent to which the road accidents impact on the economic performance of Sri Lanka during the period from 1977 to 2016. Annual time-series data are used to evaluate the accident indices for econometric analysis. Au...

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Bibliographic Details
Published in:South Asia economic journal (Institute of Policy Studies) 2019-03, Vol.20 (1), p.124-137
Main Author: Bhavan, Thangamani
Format: Article
Language:English
Subjects:
Cointegration analysis
Econometrics
Economic models
Indexes
Macroeconomics
Property
Traffic accidents & safety
Values
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Summary:The purpose of this study is to disclose accident-related indices and investigate the extent to which the road accidents impact on the economic performance of Sri Lanka during the period from 1977 to 2016. Annual time-series data are used to evaluate the accident indices for econometric analysis. Augmented Dickey–Fuller (ADF) unit root analysis and Johansen’s maximum likelihood estimator of the parameters of a cointegrating vector error correction model (VECM) are employed to test the stationary properties of the time series and to examine the long-run relationship between the variables, respectively. The results derived from the analysis confirm the existence of long-run relationship between the accident-related indices and macroeconomic indicators. The long-run elasticity values imply the signs and magnitude of impact of the accident indices on macroeconomic indicators. JEL: R41, H510, I310, I32
ISSN:1391-5614
0973-077X
DOI:10.1177/1391561418822210