50 Highway Engineering
which supplies a single value covering both workers and non-workers using the
highway.Reduction in the frequency of accidents
Assessing the economic benefit of accident reduction entails two steps. In the
case of a highway, this requires comparison of the accident rate on the existing
unimproved highway with that of other highways elsewhere in the country (or
abroad) constructed to the higher standard of the proposed new road. Normally,
the higher the standard of construction of a highway, the lower its accident rate.
The second step involves the monetary valuation of the accident reduction.
Three types of damage should be considered: Property damage
Personal injuries arising from serious accidents
Fatal accidents.
Property damage to vehicles involved in accidents is the most easily measured
in money terms. Reduced breakage of cargo can also be a significant benefit in
proposed rail-based and seaport installations. Valuations can be obtained
directly from the extent of claims on insurance policies.
The cost of serious but non-fatal accidents is much more difficult to assess.
Medical costs and the cost of lost output and personal pain and suffering con-
stitute a large proportion of the total valuation.
There is major disagreement on which method is most appropriate for esti-
mating the economic cost to society of a fatal accident. In recent times, stated
preference survey techniques have been employed to estimate this valuation.
In most cases, an average cost per accident, covering fatal and non-fatal, is
employed, with damage costs also accounted for within the final estimated value.3.3.4 Economic life, residual value and the discount rate
A highway project is often complex and long term, with the costs and benefits
associated with it occurring over a long time frame which we term the lifeof the
project, a parameter dealt with in earlier chapters. It sets a limit on the period
over which the costs and benefits are estimated, as all must occur within this
time slot, be it 25, 35 or even 50 years or more. It is related, in principle, to the
expected lifetime of the project under analysis.
Given that transport development projects have the potential to be in service
for a very long time, it may seem impossible to set a limit on the life of the
project with any degree of certainty. In practice, however, this may not give rise
to serious problems in the evaluation, as the loss of accuracy that results from
limiting the life of a project to 35–40 years, instead of continuing the com-
putation far beyond this point, is marginal to the analyst undertaking the
evaluation. The shortened analysis can be justified on the basis that, in time