Income, Income Inequality and the “Hidden Epidemic” of Traffic Fatalities

Few, if any, epidemics responsible for 20 million severe injuries and/or deaths each year, globally, receive less public attention than do traffic accidents truly making them a “hidden epidemic”. Worse yet, the epidemic is growing as evidenced by World Health Organization data which show deaths from traffic accidents increasing by 20 percent between 1990 and 2002. In this paper we examine how a country’s stage of development and its distribution of income affect its traffic fatality rate. In our theoretical analysis, we show that traffic fatalities should have a nonlinear relationship with a country’s level of per capita income while being a decreasing function of income equality. We test our model’s predictions by evaluating data from 79 countries between 1970 and 2000, taking into account other factors that influence traffic fatalities like the motorization rate, health care networks, education, and alcohol consumption and find strong evidence of the theoretical model’s predictions. Specifically, the empirical results indicate that traffic fatalities are negatively related to income equality throughout its range and also are negatively related to per capita income, above a threshold of about $11,500.