Could Higher Gas Prices Have a Positive Effect in 2017?

A lower price is something that’s always seen as a positive. And why shouldn’t it be? Paying less for an item or service means less money out of pocket and more to spend elsewhere. However, when it comes to gas prices, this notion becomes particularly tricky.

The Outlook for 2017

As we venture forward into 2017, the general outlook for gas prices is that they will increase across the country and even worldwide. From California to Michigan, Nebraska, Maine and even Mexico, where gas prices are expected to raise by as much as 20% come January,  the cost of fuel is undoubtedly on the rise. Especially since Saudi Arabia has been forced to cut its budget in recent years, another hike in gas prices to reduce the strain on their government spending is imminent. While it may not be the $4 per gallon we saw in 2008, these increases are nothing to scoff at as they may become the new norm.

However, while often unpleasant, these gas prices increases could be a net positive because of the impact high prices have on reducing traffic related accidents and fatalities.

Car Accidents in the United States

It’s no secret that car accidents are a massive problem in the United States, claiming 35,092 lives in 2015 alone. This figure is up 7% from 2014, making it the largest annual percentage increase of traffic related deaths since 1966. However, some have found that this increase could be directly related to the price of gas. According to many researchers, there is an inverse relationship between gas prices and traffic related deaths, meaning that as gas prices go down, traffic fatalities increase and vice versa. This is exactly what one sociologist at South Dakota State University found when he studied the effect of gasoline prices on traffic accidents. He estimated that “a $2 drop in gas prices can translate to about 9,000 fatalities per year in the United States.”

The Relationship Between Cost and Safety

Although this estimate may be surprising, it also makes sense for a few reasons. First, as the economy improves and gas prices fall, people are inclined to drive more, especially in the United States where public transportation is lacking in many parts of the country. Whether they have recently become employed and now commute regularly to work or are not as concerned about the cost of fuel, lower gas prices directly contribute to more vehicle miles. In fact, total vehicle miles traveled increased to 3.15 trillion miles in 2015, up from 2.9 trillion in 2013 when gas prices were higher. More people on the road driving more miles contributes to traffic congestion and more potential accidents, as was summarized by the Washington State Department of Transportation.

Moreover, when gas prices are lower, drivers are less concerned with gas saving techniques, such as accelerating slowly, maintaining a constant speed, and letting your car decelerate rather than braking. Not only are these gas saving techniques, but they are also safe driving techniques. A study conducted by General Motors found that “driving like a jerk,” or slamming on the accelerator and pounding brakes in traffic, can cost up to $100 more in gasoline. If price is removed from the equation, the incentive to drive safely can also be removed.

The Data

So does this hypothesis hold any weight? To decide, we took a look at the average price of gas in the United States and compared it to the number of traffic accidents that year. See the results for yourself below:

[wpdatatable id=16]

Gas Prices vs. Traffic Fatalities (2000-2015)

[wpdatachart id=4]

There are a couple notes about the data. First, there are many factors that influence traffic fatalities. For example, due to safety innovations and increased emphasis on road safety over the years, traffic accidents and deaths are trending downward overall. Second, this is an average price of gas across the country but prices vary widely by state, meaning that there will be different results based on the state used as a sample. That said however, similar results have been found on a state by state basis. Take for example a team of personal injury lawyers in Omaha who did this same test just for Nebraska and reached the same conclusion that we did.

As shown by the numbers for the whole country above, other than 2008 – which saw the greatest recession since the Great Depression in the 1930s – the thesis here holds up. Even in the face of increased road safety measures and the overall downward trend of fatalities, years with lower gas price see higher fatalities. Therefore, it should come as no surprise then that the average prices of gasoline in 2015 was almost a full dollar lower than the previous year and saw over two thousand more fatalities.

This sentiment has been echoed by CNN, Fortune, and numerous other sources. With more expensive gas prices on the horizon for 2017, no one should be happy to pay more for gasoline, but it does call into question the importance of out of pocket costs in relation to our safety. The future is filled with the possibilities of cheaper electric powered cars, self-driving technology, and other innovative safety features which might just be the key to finding the right balance between frugality and safety.