EVALUATING THE EFFECTIVENESS OF AN AUTONOMOUS VEHICLE MANDATE IN REDUCING THE ECONOMIC AND SOCIETAL COSTS OF CAR ACCIDENTS

Open Access
Author:
Cahn, Parker
Area of Honors:
Economics
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
  • James Edward Tierney, Thesis Supervisor
  • Russell Paul Chuderewicz, Honors Advisor
Keywords:
  • Autonomous Vehicles
  • Accidents
  • Car accidents
  • Automobile Accidents
  • Costs
  • Economic Costs
  • Societal Costs
  • Forcast
  • Vehicle Miles Traveled
  • Self-driving
  • Accident Rates
  • Future
  • Safety
  • Traffic fatalities
  • Policy
Abstract:
In 2010, the United States faced $242 billion in economic costs due to motor vehicle accidents. This includes the costs of over 30,000 fatalities, 4 million injuries, and 24 million damaged vehicles. If the costs were expanded to include quality-of-life evaluations, the negative impact of car crashes in the U.S. in 2010 came close to $1 trillion. Year over year, these costs continue to be faced as total vehicle miles traveled increase and accident rates hold steady. Today, society is at a pivotal point where new advancements in technology have the ability to reverse this trend for good. Over the next forty years, there will be a rapid rise in the development and adoption of self-driving vehicles. This new technology will have implications across the economy that are not just limited to the loss of driving occupations. One of the less considered impacts on the economy from autonomous vehicles (AVs) is the reduction in car accidents. Studies have shown that 93% of accidents stem from human error. As adoption levels of AVs increase over time, the number of accidents will begin to decline drastically with less people behind the wheel. The current legislative and regulatory landscape has become increasingly more in favor of AVs and should allow for AVs to enter the market by 2020. The next large question that needs to be answered is should the government support initiatives to increase AV adoption and if so how. This thesis develops a model to predict AV adoption rates over the next four decades with and without a federal mandate declaring all new vehicles sold after a certain date must be autonomous. Forecasts of vehicle miles traveled, average cost per accident, and accident rates are then applied to estimate how substantially a mandate would reduce total accidents and their associated costs.