Dollars for Lives: The Effect of Highway Capital Investments on Traffic Fatalities

Nguyen-Hoang, Phuong; Yeung, Ryan · 2014 · ROSA P / Mid-America Transportation Center

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Summary

This study addresses a gap in transportation safety literature by examining the relationship between highway capital investments and traffic fatalities. While previous research has analyzed state-mandated factors like speed limits and seatbelt laws, no prior study had empirically linked capital expenditures or infrastructure stock to fatality rates. The authors aim to determine whether investments in roadways, including construction and maintenance, effectively reduce deaths, providing evidence to inform public policy amidst fiscal constraints. The researchers utilized state-level panel data from the 48 contiguous U.S. states spanning 1968 to 2010. They employed negative binomial regression models to estimate the effects of logged highway capital expenditures per capita (flow) and logged highway capital stock per capita (stock) on the total number of persons fatally injured. Capital stock was derived from cumulative depreciated state and local capital outlays and maintenance spending over a ten-year period, using a 2.02% depreciation rate. To control for confounding variables, the model included state and year fixed effects, state-specific linear time trends, and controls for economic conditions, driver characteristics, government regulations, and locational factors. Robustness checks included bootstrapped standard errors, alternative depreciation rates, and ordinary least squares regressions. The results indicate that both capital expenditures and capital stock have significant negative effects on highway fatalities. Specifically, a one-unit increase in logged capital expenditures per capita was associated with a 2.5% decrease in fatalities, while a one-unit increase in logged capital stock corresponded to a 5.9% decrease. The study further found that the marginal effect of new capital expenditures depends on existing infrastructure levels. In states with lower capital stock, a 1% increase in expenditures reduced fatalities by approximately 0.03%. However, in states with high capital stock, the immediate effect of new expenditures was statistically indistinguishable from zero. Despite this, high capital stock itself remained significantly associated with lower fatality rates, suggesting long-term safety benefits from accumulated infrastructure quality. The findings imply that continued investment in highway capital is essential for saving lives, even when governments face budgetary pressures. The authors conclude that past expenditures, captured in the capital stock measure, are as critical as current spending for reducing fatalities. For states with low capital stock, immediate investments can yield rapid safety improvements. For states with high capital stock, while new expenditures may not show immediate fatality reductions, they contribute to maintaining the capital stock that sustains lower death rates over time. The study warns that declining revenues from gas taxes and reduced spending could undermine traffic safety, emphasizing the life-saving value of sustained infrastructure investment.

Key finding

Highway capital expenditures and accumulated capital stock significantly reduce traffic fatalities, with new investments yielding larger marginal safety benefits in states that have lower levels of existing highway capital.

Methodology

modeling

Sample size: 48

Provenance

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Summary generated by qwen3.6-27b-prismaquant on 2026-06-10; verification: verified.

Topics

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• fatality injury trends
• comparative international

Information type

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• Empirical Findings: crash risk outcomes