For some time now the Belgian government has been attaching increasingly more importance to the matter of road safety. And not without good reason, since this is one of the most relevant issues for today’s citizens. The government has already shown that it takes road safety very seriously: a visible increase in speed checks, a 100 million Euro investment plan to tackle Flanders’ black spots along with major public works in Antwerp. Road safety is also an area where eyebrows are raised when costs come into the equation. People believe that costs should not be taken into account when a life can be saved through investment in road safety, since you cannot put a value on a life. However, this is wrong since it would imply that every life-saving measure should be implemented as long as its opportunity cost is less than infinite. Today’s financial resources could never reach that goal. A five km/h speed limit might well be a safety-effective measure, but it would inflict considerable damage to the economy. And that is the heart of the matter: our resources are not infinite and consequently should be allocated wisely. Moreover, since resources can only be spent once, they should be spent on those measures that increase the prosperity of our citizens. Efficiency can be pursued in essentially two ways: on the one hand, a level of expenditures in road safety has to be set, while on the other hand, careful thought has to go into how best to allocate the available resources and to which specific areas. A viable economic policy regarding the latter is the subject of this paper. Assuming such an economic analysis is accepted, we are faced with the fact that no unequivocal framework exists to guarantee the optimal allocation of the resources. This paper’s aim is discuss topics that deserve our attention in the event of just such an economic analysis being performed. It will become clear that several topics rightly deserve our attention and no unambiguous answer is available. The paper is set out as follows: the first section deals with the important difference between cost-benefit analysis and cost-effectiveness analysis, since these are the two most widely used tools in economic analysis. The following topics, important when carrying out a cost-benefit analysis, will be considered later on: - Inter temporal comparison of costs and benefits (section 3); - Use of results from international studies (section 4) - Valuation of human life (section 5); The second part of this paper covers a cost-benefit analysis carried out on the seat belt reminder system in Belgium. (Author/publisher)
Abstract