Socio-economic appraisals

Selecting measures and ensuring that maximum returns are realized entails the benefits of road safety measures needed to reach safety targets to be quantified and ranked, using cost-effectiveness, multi-criteria analysis and cost-benefit analysis or a combination of these methods. A recent EU funded thematic network ROSEBUD provides further information on these issues [44]

• Cost-effectiveness analysis in cost-effectiveness analyses the costs of a measure are set against its effects. The measure’s effects are not expressed in monetary terms. Starting from a given safety target and budget, this method identifies the path which will produce the highest casualty savings. Policy measures are ranked according to their estimated cost-effectiveness ratios. Cost-effectiveness analysis is widespread in OECD countries (e.g. Finland, the Netherlands, and the United States). An ETSC review in 2003 identified a variety of cost-effective measures which could be adopted by the European Union [49]
• Multi-criteria analysis is a qualitative method which is more complex than other appraisal options. It assesses the impact of a measure against a wide range of general objectives. Value scales and weighting schemes are used to indicate a value trade-off between criteria and objectives. Such analyses are also commonly used in OECD countries.
• Cost-benefit analysis in an essential road safety resource allocation tool in best practice countries. The result is obtained by comparing crash and injury costs with benefits of avoiding the crash and injury. Avoiding such crash and injury costs represents the economic benefit of road safety measures. The benefit-cost ratio represents the economic advantage of the safety measures [21]. Cost-benefit analysis requires the valuation of lives saved and injuries avoided. Some best practice countries adopt values of statistical life, based on estimates of peoples’ “willingness to pay” for small reductions in risk. Others adopt a “gross output” or “human capital” approach which values the loss of current resources and losses in future output, and sometimes adds a significant sum to account for related “pain, grief and suffering”. Other measures can also be used, such as those based on the values revealed in “court awards” to surviving dependents. Given the limited availability of robust data, cost benefit analysis is not yet used widely, but it is the preferred tool of road safety professionals. In the absence of such data, cost-effectiveness can be used to select and rank the most effective measures, once a target has been set.