Social cost of road crashes and injuries 2020 update

It provides estimates, at June 2020 prices, of:

• average social cost per injury and per crash
• total social cost of road crashes and injuries in 2019.

Social costs measures the total cost of road crashes to the nation, including loss of life and life quality, loss of productivity, medical, legal, court and vehicle damage costs. Injury costs are classified into fatal, serious and minor injuries as reported by crash investigators.

Social Cost of Road Crashes and Injuries 2020 [PDF, 584 KB]

Key results

• The total social cost of motor vehicle fatal and injury crashes in 2019 is estimated at approximately $4.6 billion (down 6% from $4.9 billion in 2018). This estimate covers all injuries recorded by NZ Police, hospitals and ACC.
  
• The changes in fatal, serious, and minor injuries are summarised below.

• The updated value of statistical life (VOSL) is $4.42 million per fatality at June 2020 prices. Adding other social costs gives an updated average social cost per fatality of $4.46 million.
  
• For non-fatal injuries, the updated average social cost is estimated at $467,700 per serious injury and $25,300 per minor injury.
  
• Allowing for non-reported cases of injuries from road crashes, the updated average social cost is estimated at $839,000 per reported serious injury and $79,000 per reported minor injury. These estimates are useful for assessing interventions (e.g. seat belt wearing initiatives) that aim to reduce the number of injuries but not crashes. They are also useful for establishing the social cost of a specific crash considering the number of injuries sustained in that crash.
  
• In per-crash terms, the updated average social cost is estimated at $5.30 million per fatal crash, $987,000 per reported serious crash and $100,000 per reported minor crash. These estimates are useful for assessing interventions (e.g. speed management interventions) that aim to reduce the number of crashes and the associated injuries.

More information

Value of statistical life (VOSL)

The VOSL is a measure of the pain and suffering due to a loss of life or life quality to the injured and to their family. For non-fatal injuries, it also includes the loss of output due to permanent disability. You can learn more about how this is calculated on page 22, in the Appendix: Methodology.

Incorporating estimates into the process for evaluating transport projects

Road crashes impose intangible, financial and economic costs to society. These costs include reduced quality of life for survivors; reduced economic productivity; and medical and other resource costs. We update the social cost of road crashes and injuries annually to allow comparison of the costs and benefits of any road safety actions in current dollars.

To ensure we target our road safety resources most effectively, the cost of any safety interventions should be evaluated against the resulting benefit expressed in terms of social cost. When there are a number of potential solutions to a transport problem, using social cost information allows us to make consistent comparisons between solutions, especially when these solutions have different impacts on the risks of crashes and the injuries that may be sustained in them.

The updated social cost estimates will replace the 2019 estimates currently incorporated in the New Zealand Transport Agency’s Crash Analysis System (CAS)(external link) to facilitate this.

Crash Analysis System (CAS)(external link)(external link)

The CAS is widely used by transport engineers and analysts for evaluating the safety impacts of any transport project that affects road safety. The updated estimates will also be used by transport officials for evaluating the safety impacts of any transport policy, rules or legislation.

Report methodology

You can find a brief description of the methodology used to work out the estimates in the appendix of the report. For a more detailed description, refer to the June 2006 update. 

Social costs road crashes and injuries and ACC’s motor vehicle claims

The social cost estimates include all costs (including non-financial cost) incurred as a result of a crash/injury, irrespective when the cost incurs and who pays. The total social cost estimates are based on accident year and include the estimated cost of loss of life and life quality, loss of output, medical cost, property damage costs and legal and court costs. All on-going costs are incorporated in the social cost estimates. In other words, the social cost estimates is a measure of the true costs of road crashes and injuries.

By comparison, ACC claims costs represent the financial burden to ACC, which covers only part of the social cost components.