Economic Payback of
Road Safety Advertising
in Northern Ireland
October 2012
Oxford Economics
Abbey House
121 St Aldates
Oxford
OX1 1HB
UK
tel: 44 1865 268900
fax: 44 1865 268906
Economic Payback of Road Safety Advertising in NI
Contents
1
INTRODUCTION ....................................................................................................................................... 1
1.1
1.2
2
ECONOMIC PAYBACK ANALYSIS AND BEST PRACTICE .............................................................................. 2
2.1
2.2
3
BEST PRACTICE PRINCIPLES............................................................................................................................ 2
OTHER BEST PRACTICE EXAMPLES ................................................................................................................... 4
CRITIQUE OF EXISTING METHODOLOGY AND SCOPE FOR DEVELOPMENT OF METHODOLOGY ................ 5
3.1
3.2
3.3
4
SCOPE OF PROJECT ...................................................................................................................................... 1
REPORT STRUCTURE .................................................................................................................................... 1
EXISTING LYLEBAILIE METHODOLOGY AND PAYBACK RESULTS............................................................................... 5
CRITIQUE OF EXISTING METHODOLOGY / SCOPE FOR DEVELOPMENT ...................................................................... 7
SUMMARY............................................................................................................................................... 11
ENHANCED OXFORD ECONOMICS METHODOLOGY ............................................................................... 12
4.1
4.2
4.3
4.4
ENHANCED METHODOLOGY STAGES.............................................................................................................. 12
‘EXPECTED’ DEATHS AND SERIOUS INJURIES .................................................................................................... 13
COST PER DEATH/ SERIOUS INJURY ............................................................................................................... 15
WISDOM OF CROWDS AND ECONOMIC PAYBACK............................................................................................. 15
5
OXFORD ECONOMICS ECONOMIC PAYBACK BASED ON ENHANCED METHODOLOGY ............................ 16
6
VALIDATING STATEMENT ....................................................................................................................... 18
Economic Payback of Road Safety Advertising in NI
1
Introduction
Oxford Economics was commissioned in October 2012 by LyleBailie International to update the
previous economic payback analysis of road safety advertising in NI for the period 1995-2011.
The aim of this piece of work is to develop further the original methodology applied by
LyleBailie. The enhanced Oxford Economics methodology accounts for a wider range of factors
that impact upon ‘expected’ road deaths and injuries and thereby improves estimation of the
deadweight effect and consequently the net additional economic payback of DOE’s road
safety campaign.
1.1
Scope of project
This project covers the following:
•
A brief overview of best practice approaches to economic payback analysis
•
A critique of the original LyleBailie methodology and identification of areas where the
methodology could be improved in line with best practice
•
A detailed description of the enhanced Oxford Economics approach adopted highlighting
consistency with Government appraisal / impact analysis guidelines
•
Revised estimate of the total economic saving/ payback of DOE’s road safety advertising
campaign based on the enhanced methodology, with results presented for alternate
assumption scenarios
•
A validating statement which can accompany the payback analysis in relevant publications
1.2
Report structure
This report is structured as follows:
Chapter 1: Introduction
Chapter 2: Discussion of economic payback analysis and best practice approaches
Chapter 3: What has already been done and scope for development – LyleBailie’s existing
methodology and economic payback result, methodology critique and identification of areas
where the methodology could be improved
Chapter 4: Enhanced Oxford Economics payback methodology – building on the existing
LyleBailie approach, this includes consideration of deadweight effects, sensitivity analysis and a
rigorous assessment of the key assumptions on the economic cost per death and serious injury
Chapter 5: Revised Oxford Economics economic payback results – results presented for
alternate assumption scenarios
Chapter 6: Validating statement which can accompany the payback analysis in relevant
publications
Economic Payback of Road Safety Advertising in NI
2
Economic payback analysis and best practice
Economic payback definition: In the context of this work economic payback is defined as the
monetary value saved through the prevention of road deaths and serious injuries attributable to
DOE’s road safety advertising campaign, compared to the public money spent on the
campaign.
It is important to note from the outset that this piece of work is not a DTI-type economic
efficiency test designed to assess the impact of the campaign on the regional and national
economies.
2.1
Best practice principles
Central to any economic appraisal / economic impact study is the need to assess whether the
project or in the context of this work, the road safety advertising campaign, will bring additional
benefits over and above what would have happened in the campaign’s absence. i.e. would
death and injury rates per 10,000 vehicles have fallen at the same rate without the campaign
given changes in the age profile of drivers, average road speeds, urbanisation, increased
economic sophistication etc?
There is a need to assess this deadweight case in order to avoid over-estimating the net
economic payback. There are several publications available providing guidelines addressing
the issue of additionality including HM Treasury Green Book guidelines and also English
Partnership’s Additionality Guide. The Green Book refers to the net benefit of any intervention
whether it be a government policy or an advertising campaign as “the gross benefits less the
benefits that would have occurred in the absence of intervention (the ‘deadweight’) less
the negative impacts elsewhere (including ‘displacement’ of activity), plus multiplier
effects”.
As defined in the Green Book, ‘deadweight’ refers to outcomes which would have occurred
without intervention (i.e. without the advertising campaign). Its scale can be estimated by
assessing what would have happened in the ‘do minimum’ case, ensuring that due allowance is
made for the other impacts which impact on net additionality such as the factors mentioned
above, e.g. changes in the age profile of drivers.
In addition it can already be seen from LyleBailie’s research that there are other contributory
factors to reducing the number of road deaths and serious injuries including education, law
enforcement etc. which would occur independently of the advertising campaign (Fig 2.1). Figure
2.1 shows that the entire estimated economic payback saving is correctly attributed to a range
of influences and not just the road safety advertising campaign, although the advertising
campaign is estimated to have the largest individual influence.
Economic Payback of Road Safety Advertising in NI
Fig 2.1: NI serious injury / fatality reduction £m payback per influential factor
1995-2011
1
Source: Millward Brown Telephone Survey / Omnibus
Base: Approx 1000 respondents per wave (8133 over 8 years)
Economic development can also play a role in reducing death and injury rates. When
comparing road deaths in NI to Lithuania (Lithuania has the highest number of road deaths per
head of population in Europe), it could be argued that richer nations, with higher so called
economic ‘sophistication’, could also be seen as a contributory factor to reducing road deaths
and serious injuries.
As the NI economy has enjoyed a golden era over the last decade, it could be said that falling
road death and injury rates may be linked to this increasing economic prosperity which is not
explicitly captured as one of the influences in Fig 2.1 (in which case economic performance
should be factored into the deadweight effect). However drilling down to understand the causal
effect between economic prosperity and road death rates, it is likely that richer economies have
better roads, more stringent driving tests (and spend more on these areas as they get richer)
and it is this rather than the actual rising prosperity that directly influences road death rates.
Therefore the current LyleBailie methodology could be said to account for this by identifying a
range of influences which contribute to overall economic savings.
1
Figures based on total of £4.75bn cost of injury / fatality (including human cost) that has been saved from 1995 to
2010 by a range of factors
Economic Payback of Road Safety Advertising in NI
Economic Payback of Road Safety Advertising in NI
The ideal experiment for measuring the impact of a road safety campaign would be comparing
two
with exactly
the same road
safety of
characteristics
structure
of drivers,
quality
The countries
ideal experiment
for measuring
the impact
a road safety(age
campaign
would
be comparing
of
infrastructure,
wealth,
driving
test
standards
etc) but (age
where
one has
an advertising
tworoad
countries
with exactly
the same
road
safety
characteristics
structure
of drivers,
quality
campaign
and
the
other
does
not,
in
order
to
have
a
true
counterfactual
measure
and
isolate
of road infrastructure, wealth, driving test standards etc) but where one has an advertising
the
impactand
of the
a other
campaign
amongst
other
influences.
In practice however
campaign
does not,
in order
to have
a true counterfactual
measure no
and perfect
isolate
counterfactual
situation
such
as
this
exists.
the impact of a campaign amongst other influences. In practice however no perfect
counterfactual
situation
as this
Another
important
issuesuch
relevant
to exists.
this work is that of replacement demand which based on
our
correspondence
withrelevant
the Department
has not been
considered
in this
Another
important issue
to this workforis Transport
that of replacement
demand
which based
on
research
to
date
or
in
the
monetary
road
death
/
serious
injury
cost
parameters
compiled
by
the
our correspondence with the Department for Transport has not been considered in this
Department.
For
if a person
has been
injured
and
unable
to work,
it hasby
been
research to date
or example
in the monetary
road death
/ serious
injury
cost
parameters
compiled
the
assumed
that
this
results
in
lost
output.
However
it
is
likely
that
the
job
can
be
taken
by
a
Department. For example if a person has been injured and unable to work, it has been
migrant
a new
to lost
the output.
labour market
from
meaning
thebynet
assumedorthat
this entrant
results in
However
it isnon-employment
likely that the job
can bethat
taken
a
output
impact
will
actually
be
less.
It
is
however
beyond
the
scope
of
this
work
to
re-estimate
migrant or a new entrant to the labour market from non-employment meaning that the net
the
Department
foractually
Transport
output
impact will
be cost
less.parameters.
It is however beyond the scope of this work to re-estimate
the Department
for Transport
The
HM Treasury
Green cost
Bookparameters.
also outlines issues surrounding ‘displacement’ and
‘substitution’
impactsGreen
which are
closely
They
measure
the extent‘displacement’
to which the benefits
The
HM Treasury
Book
also related.
outlines
issues
surrounding
and
of
an
intervention
are
offset
by
reductions
of
output
or
employment
from
elsewhere.
These
‘substitution’ impacts which are closely related. They measure the extent to which the benefits
issues
are much less
this type ofofeconomic
analysis.
of an intervention
areimportant
offset byforreductions
output orpayback
employment
from elsewhere. These
issues are much less important for this type of economic payback analysis.
2.2
Other best practice examples
2.2
Other
examples
In terms of
otherbest
roadpractice
safety payback
studies, LyleBailie runs virtually the same road safety
advertising
the Republic
Ireland LyleBailie
(ROI) on behalf
of the Road
Safety
Authority.
In terms of campaign
other roadforsafety
paybackofstudies,
runs virtually
the same
road
safety
The
campaign
consists
television
and
safety
advertisements,
one
beingAuthority.
‘Get the
advertising
campaign
forofthe
Republic
of radio
Irelandroad
(ROI)
on behalf
of the Road
Safety
point,
not the consists
points’. of
The
only difference
approach
in the ROI,
terms‘Get
of the
the
The campaign
television
and radiowith
roadthe
safety
advertisements,
oneinbeing
economic
analysis,
that difference
the costs per
and serious
injury
are in
based
upon
point, not payback
the points’.
The isonly
withfatality
the approach
in the
ROI,
terms
of the
the
2
However
apart
from
this
it
is
our
understanding
that
the
payback
Goodbody
Approach.
economic payback analysis, is that the costs per fatality and serious injury are based upon the
methodology
adopted 2for However
ROI is identical
the one
DOE road safety
apart to
from
this used
it is for
ourthe
understanding
that campaign.
the payback
Goodbody Approach.
methodology
ROI isdesk-based
identical toresearch
the one used
for the
DOE road
safety campaign.
Having tried toadopted
conductfor
further
into other
economic
payment
assessments
relating
to
road
safety
campaigns,
we
found
limited
evidence
or
examples
however
with regards
Having tried to conduct further desk-based research into other economic payment assessments
to
general
economic
assessments,
underlying
principles
(as set
out above)
tend to
relating
to road
safetyimpact
campaigns,
we foundthe
limited
evidence
or examples
however
with regards
be
followed.economic impact assessments, the underlying principles (as set out above) tend to
to general
be followed.
2
The associated costs used in the ROI economic payback analysis are based on a study carried out by Goodbody
Economic
Consultants on behalf of the Department of Transport in 2004. The following values were estimated: Fatal =
2
The associated
costs
used
in the ROI
economic
are based
on =a€2,400.
study carried out by Goodbody
€2,280,000;
Serious
Injury
= €304,600;
Slight
Injury =payback
€30,000analysis
and Material
Damage
Economic Consultants on behalf of the Department of Transport in 2004. The following values were estimated: Fatal =
Economic Payback of Road Safety Advertising in NI
3
Critique of existing methodology
development of methodology
and
3.1
Existing LyleBailie methodology and payback results
scope
for
As mentioned earlier, LyleBailie has developed a methodology to measure the economic
payback of DOE’s road safety campaign. This is the same as the methodology applied in ROI
for the Road Safety Authority apart from the difference in the associated costs of fatalities and
serious injuries as mentioned previously. The methodology and economic payback results are
described below. It must be noted however that the only data currently not available for the
2010 analysis is the 2010 total NI licensed vehicles and the 2010 number of NI drivers. Hence
an assumption has been applied based on Oxford Economics professional judgement. This
can be found by way of summary in Annex A.
‘Wisdom of Crowds road’ death /serious injury influences
Based on the approach of ‘Wisdom of Crowds’, Millward Brown Ulster have conducted seven
NI surveys between 2003-2010, designed to capture information on what individuals find most
influential to road death / serious injury reduction in NI. A range of factors have been identified
as contributing to this reduction (see Fig 3.1 below). Based on an average of the seven
surveys, road safety TV advertisements were recognised as most influential (23.03%)
followed by police enforcement (12.55%), penalties (12.16%) and road traffic laws (11.38%).
Fig 3.1: NI death / serious injury reduction influential factors
CONTRIBUTIONS TO ROAD CARNAGE
REDUCTION IN NORTHERN IRELAND
The existing LyleBailie methodology applies this percentage of individuals that noted road
safety adverts as being the most influential to the total economic saving (based on an expected
PERCEIVED
“VERY
INFLUENTIAL”
FACTORS
SAVING
LIVES
AS A %
OF
ALL
minus
actual estimate
of road
deaths and serious
injuriesIN
that
have been
prevented
over
the
“VERY
INFLUENTIAL”
FACTORS
–
AVERAGED
OVER
8
NI
SURVEYS
2003
–
2012
period 1995-2010) to arrive at the economic
Changes topayback
Driving of the road safety campaign. This in our
Police
Test,is
7.29%
view is a perfectly valid approach and
adopted in the enhanced
Oxford Economics
enforcement, 12.55%
methodology. More details are provided on methodology and payback results below.
Road Traffic
Table 3.1 below provides
an overview of the underlying figures used to arrive at the current
Laws, 11.38%
estimated overall economic saving. The estimates for ‘potential’ or ‘expected’ deaths and
serious injuries over the period 1995-2010 are based on 1992-1994 average
death
andby
serious
Penalties
Imposed
Courts,
12.16%
injury rates per
10,000
Car Design
& licensed vehicles (immediate period pre start of the advertising
Features, 7.60%
campaign) – again
Oxford Economics supports this approach and adopt the same assumption.
Other estimates based on average death and serious injury rates from an earlier period (i.e.
1982-1994) would in our view over-estimate the expected number of deaths and serious injuries
Road
in the periodEngineering,
after (1995-2010).
6.35%
All DOE
Advertising, 23.03%
Education in
Schools, 9.12%
News
Coverage, 10.52%
Source: Millward Brown Telephone Survey / Omnibus
Base: Approx 1000 Respondents per wave (8133 over 8 years)
Economic Payback of Road Safety Advertising in NI
Table 3.1: Road death and serious injury ‘savings’ (1995-2011)
Year
NI Licensed
Vehicles
Potential road
deaths at 2.556
per 10,000 LV's
Actual Deaths
Saving (deaths)
Potential road
injuries at 29.64
per 10,000 LV's
Actual road
injuries
Savings (injuries)
KSI Human
Saving
1995
611,562
156
144
12
1,812
1532
280
293
1996
639,286
163
142
21
1,895
1599
296
317
1997
683,569
175
144
31
2,026
1548
478
509
1998
695,360
178
160
18
2,061
1538
523
540
1999
720,645
184
141
43
2,136
1509
627
670
2000
730,730
187
171
16
2,166
1786
380
395
2001
767,305
196
148
48
2,274
1682
592
640
2002
794,477
203
150
53
2,355
1526
829
882
2003
852,742
218
150
68
2,527
1288
1239
1307
2004
883,261
226
147
79
2,618
1183
1435
1513
2005
917,399
234
135
99
2,719
1073
1646
1745
2006
958,677
245
126
119
2,841
1211
1630
1749
2007
1,008,289
258
113
145
2,988
1097
1891
2036
2008
1,024,396
262
107
155
3,036
990
2046
2201
2009
1,043,905
267
115
152
3,094
1035
2059
2211
2010
1,050,481
268
55
213
3,113
864
2249
2463
2011
1,053,338
269
59
210
3,122
825
2297
2507
Total
14,435,422
3,689
2,207
1,482
42,781
22,286
20,495
21,977
Source: LyleBailie and PSNI
‘Potential’ / ‘Expected’ road deaths and injuries
The ‘potential’ deaths and serious injuries (as quoted in Table 3.1) are calculated using the
following ‘expected’ death and injury rates per number of licensed vehicles:
1.
During the 3 years 1992-1994, the cumulative total of licensed vehicles in NI was 1,760,
588
2.
During the same three years 1992-1994, the cumulative total of road deaths was 450 and
serious injuries was 5,214
3.
Based on the above, the average rate of road deaths per 10,000 licensed vehicles for
1992-1994 was 2.556. Based on a similar calculation, the average rate of serious injuries
was 29.62
Death and serious injury ‘savings’
To calculate the economic saving generated, firstly the saving (people-based) for both deaths
and serious injuries are calculated by subtracting actual deaths and injuries (as recorded by
PSNI) from potential deaths and serious injuries. To then calculate the monetary saving, the
absolute number of deaths and injuries ‘saved’ are multiplied by the respective costs per head as
in Table 3.2 below. These costs are based on detailed Department for Transport estimates. Note
costs include lost output, medical and ambulance costs and a monetary human ‘cost’. (More is
said on these cost parameters below – note two-thirds of the road death cost is the human
cost element)
Table 3.2: Cost per individual death and serious injury (June 2005 prices)
Injury severity
Fatal
Serious
Lost
output
Human
costs
490,960
18,920
936,380
130,110
Medical
and
Total (£
ambulance June 2005)
840
11,460
1,428,180
160,490
Source: Highways Economics Note No. 1, 2005 Valuation of the Benefits of Prevention of Road Accidents and
Casualties
Economic Payback of Road Safety Advertising in NI
Existing economic saving and payback results
The current LyleBailie methodology results in the following total economic savings over the
period 1995-2011:
•
1,482 road deaths at £1.43m per death = £2.12bn
•
20,495 serious injuries at £0.16m per injury = £3.29bn
•
Total economic saving = £5.40bn
With 23.03% of interviewees stating that road safety advertising campaigns were the most
influential factor on death / serious injury reduction, this is interpreted to be the share of the total
economic saving directly attributable to road safety advertising.
•
Total economic saving attributable to road safety advertising campaign = £5.40bn*
23.03% = £1.25bn
•
Given public spending on the campaign over the period of £23.09m, this equates to a
payback ratio return of £54: £1 public money.
Note different payback results are presented by LyleBailie based on different assumptions
used. The above results are based on the key assumption of death and injury average rates for
the period 1992-1994.
3.2
Critique of existing methodology / scope for development
The role for Oxford Economics in this piece of work has been to critique the LyleBailie
methodology and building on it, develop an improved economic payback methodology which
meets best practice criteria subject to available information.
From our knowledge of the existing LyleBailie approach, there are some presentational and
methodological issues worthy of consideration, which are the basis for how Oxford Economics
come up with an enhanced methodology and report on it.
Presentation of the methodology
•
The current economic payback estimate of £54 for every £1 invested in the campaign over
the period 1995-2011 will be striking to readers and arouse questions over methodology.
(As shown below inclusion of the ‘human cost’ element makes a major difference to the
payback ratio). We feel that to build credibility for and improve understanding of the
analysis a clear and comprehensive methodology write-up and validating statement
is required, which we hope is addressed by this report.
Economic Payback of Road Safety Advertising in NI
Economic Payback of Road Safety Advertising in NI
Cost per death and serious injury assumptions
Cost
deathitand
serious
injury in
assumptions
• In per
particular,
is critical
to explain
detail to the target audience the economic cost per
•
•
•
•
•
•
•
•
•
death
and serious
injurytoassumptions
as this
costtarget
is paramount
In
particular,
it is critical
explain in detail
to the
audience to
thecalculating
economic the
costtotal
per
economic
The result
estimated
Lyle
Bailie
is based ontocost
parameters
death andpayback.
serious injury
assumptions
asby
this
cost
is paramount
calculating
thetaken
total
from
the Department
for Transport
Highways
Economics
No.1,
2005parameters
Valuation of
the
economic
payback. The
result estimated
by Lyle
Bailie isNote
based
on cost
taken
benefits
of
prevention
of
road
accidents
and
casualties
(January
2007).
The
cost
from the Department for Transport Highways Economics Note No.1, 2005 Valuation of the
parameters
do not represent
costs
as (January
the result2007).
of road
benefits
of prevention
of road actual
accidents
andincurred
casualties
Thetraffic
cost
collisions.
Rather
they
are
the
cost-benefit
values
and
represent
the
benefits
which
parameters do not represent actual costs incurred as the result of road traffic
would
be obtained
by prevention
of road traffic
collisions.
collisions.
Rather they
are the cost-benefit
values
and represent the benefits which
would
be obtained
by prevention
roadintraffic
The
monetary
cost parameters
are of
given
terms collisions.
of UK values (2005 prices). Given that
UK
and cost
productivity
levels
higher
thanofNI,
consider
it appropriate
to adjust
The wage
monetary
parameters
are are
given
in terms
UKwevalues
(2005
prices). Given
that
the
cost
assumptions
in
line
with
this
(see
later
–
a
factor
of
approximately
0.9
is
applied
to
UK wage and productivity levels are higher than NI, we consider it appropriate to adjust
the
UK
cost
parameters).
An
argument
could
be
made
to
apply
this
factor
only
to
the
lost
the cost assumptions in line with this (see later – a factor of approximately 0.9 is applied to
output
though we have
applied the
factor
eachtoofapply
the cost
the UKelement
cost parameters).
An argument
could
be to
made
thisparameters.
factor only to the lost
output
element
thoughwith
we have
theaccording
factor to each
of the
cost parameters.
The cost
associated
each applied
casualty,
to the
Highways
Economics Note, is
made
up associated
of lost output
(aseach
discussed
above),
medical
andHighways
ambulance
costs andNote,
human
The cost
with
casualty,
according
to the
Economics
is
costs.
It
is
of
our
understanding
that
lost
output
does
not
take
into
consideration
the
issue
made up of lost output (as discussed above), medical and ambulance costs and human
of
replacement
demand.
If someone
cannot
return
to not
work
dueinto
to consideration
injury or death,
does
costs.
It is of our
understanding
that lost
output
does
take
theit issue
not
necessarily
mean
that
the
entire
output
is
lost.
It
is
possible
that
the
job
vacated
would
of replacement demand. If someone cannot return to work due to injury or death, it does
be
by migrant
labour
or someone
whoisislost.
currently
unemployed
hence
the net output
not filled
necessarily
mean
that the
entire output
It is possible
that the
job vacated
would
impact
would
be
less
than
the
gross
output
impact.
Also
if
an
unemployed
person
fills
their
be filled by migrant labour or someone who is currently unemployed hence the net output
position,
having
previously
claimed
benefits
before,Also
thisif could
actually result
in fills
a fiscal
impact would
be less
than the
gross output
impact.
an unemployed
person
their
saving.
(There
is
a
possibility
of
displacement
with
the
vacated
job
being
filled
by
a
person
position, having previously claimed benefits before, this could actually result in a fiscal
leaving
mayof
not
be replaced).with
While
is important
to flagfilled
up these
saving. another
(There isjob
a which
possibility
displacement
theitvacated
job being
by a issues,
person
itleaving
is however
beyond
the
scope
of
this
work
to
re-estimate
the
Department
for
Transport
cost
another job which may not be replaced). While it is important to flag up these issues,
parameters,
which would
be aof substantial
we have
contacted cost
the
it is however beyond
the scope
this work to exercise.
re-estimateHowever
the Department
for Transport
Department
for
Transport
to
find
out
in
greater
detail
how
lost
output
costs
are
calculated.
parameters, which would be a substantial exercise. However we have contacted the
Although
notfor
having
received
a response
back, we
will how
followlost
thisoutput
up. costs are calculated.
Department
Transport
to find
out in greater
detail
3
Although
not cost
having
received
response
back,
will follow
up. is based on willingness
element
of aoverall
death
andwe
serious
injurythis
costs
The
human
3
to pay
and represents
the of
pain,
griefdeath
and suffering
to the
casualty,
friends.
overall
and serious
injury
costs is relatives
based onand
willingness
The
human
cost element
Human
costs
/ benefitsthe
arepain,
not grief
typically
payback relatives
or economic
impact
to pay and
represents
and included
suffering into other
the casualty,
and friends.
analysis,
normally
because
difficultincluded
to quantify.
It is our
view that
we present
the
Human costs
/ benefits
arethey
notare
typically
in other
payback
or economic
impact
results
with
and
without
human
costs
in
order
to
compare
the
outcomes
with
other
analysis, normally because they are difficult to quantify. It is our view that we present the
types
payback
analysis.
(Refer
back
tableto3.2
for costs
resultsofwith
and without
human
costs
in to
order
compare
theassociated
outcomes with
with death/
other
serious
injury).
types of payback analysis. (Refer back to table 3.2 for costs associated with death/
serious injury).
Opportunity
cost is another issue to be considered. Given that police/ ambulance costs are
incurred,
these
could
have
put to use in
another
and hencecosts
carryare
an
Opportunity
costservices
is another
issue
to been
be considered.
Given
that situation
police/ ambulance
opportunity
cost.
It is ourcould
understanding
parameters
are available
incurred, these
services
have been that
put to
use in another
situation for
andcosts
hencewhich
carryare
an
part
of
the
valuation
of
an
injury
accident
but
which
are
not
specific
to
casualties
(police
and
opportunity cost. It is our understanding that parameters are available for costs which are
administrative
costs, of
asan
well
as property
although
these
are not
part of the valuation
injury
accidentcosts)
but which
are not
specific
to included.
casualties (police and
administrative costs, as well as property costs) although these are not included.
3
Human costs are defined in the Department for Transport’s Highways Economics Note No. 1 as based on willingness
to pay values which represent pain, grief and suffering to the casualty, relatives and friends, and for fatal casualties, the
3
intrinsic
of are
enjoyment
and above
consumption
of goods
and services
Humanloss
costs
definedofinlife
theover
Department
forthe
Transport’s
Highways
Economics
Note No. 1 as based on willingness
to pay values which represent pain, grief and suffering to the casualty, relatives and friends, and for fatal casualties, the
intrinsic loss of enjoyment of life over and above the consumption of goods and services
Economic Payback of Road Safety Advertising in NI
•
Another important point to note is that the economic cost associated with each death and
serious injury is age dependent. For example the death of a younger person will have a
higher lifetime economic cost than that of an older person due to more years of lost output.
If the age profile of deaths and serious injuries in NI differed markedly from the UK, an
adjustment should be made for this. However this information was not available to us and
the difference is unlikely to be large.
•
Two other factors we would like to have included but have not been possible due to data
limitations are; where deaths and serious injuries occur (different cost parameters are
available for urban versus rural) and splitting licensed vehicles into type (e.g. undertaking
‘expected’ versus actual analysis for cars, motorcycles, HGVs etc).
Additionality / deadweight
•
As stated before it is essential to measure the additional benefits that this campaign
generates. This ensures that the economic payback analysis accounts for the deadweight
effect and measures only the impacts that are purely associated/ additional to this
campaign. To be fair many factors associated with reduction in road deaths / serious
injuries have already accounted for in the current model (e.g. the other influences in Fig
3.1), though other factors could be included. (Recall from above we consider economic
sophistication to be part of the overall influences and not a separate direct influence)
•
Some of the previous analysis to predict potential road deaths for the period 1995-2011 has
been measured based upon 1982-1994 average death and serious injury rates per 10,000
licensed vehicles. (Analysis is also based on the 1992-1994 average death and serious
injury rates – it is not clear to us which set of analysis is accepted and used by DOE). As
said previously, we believe that in the context of this work the average death and injury
rates should be based closer to when the advertising campaign began. It is clear the
difference that this makes to the Killed and Serious Injury (KSI) human saving. Previous
research by Lyle Bailie based on 1982-1994 rates over the period 1995-2007, estimated the
overall KSI saving to be 21,032 whereas in comparison to the 1992-1994 rates for the same
time period, the KSI saving was 12,488.
•
Even with applying death and injury rates for the period immediately before the start of the
advertising campaign, there are factors outside those in Fig 3.1 which in the
deadweight case will affect death and injury rates – these include the age profile of
drivers, average road speeds, urbanisation, average distance travelled by vehicle etc.
-
LyleBailie publications for DOE have shown that male drivers aged 17-24 are four times
more likely to suffer a fatal car accident than the average driver (and three times more
likely for a serious injury) – Figs 3.2 and 3.3. Therefore since the share of male 17-24
drivers has been falling (Fig 3.4), this should be an important influence on the
deadweight scenario i.e. the number of fatal accidents and serious injuries should also
fall).
Economic Payback of Road Safety Advertising in NI
Economic Payback of Road Safety Advertising in NI
Fig 3.2: Deaths by age band
4
Fig 3.2: Deaths by age band
Serious Serious
injury per
injury
capita
perratio
capita
(2001-2005)
ratio (2001-2005)
Deaths per
Deaths
capita
per
ratio
capita
(2001-2005)
ratio (2001-2005)
5
Fig 3.3: Serious injuries by age band
5
4
4
3
3
2
2
1
NI average
NI average
1
0
M 1724
M 2534
M 3549
M 5064
M 65+
F 1724
F 2534
F 3549
F 5064
F 65+
4
3
3
2
2
NI average
1
NI average
1
0
M 1724
M 2534
M 17Source:
24
M 2534
0
M 3549
M 50- M 65+
64
F 1724
F 2534
F 3549
F 5064
F 65+
M 35- M 50- M 65+ F 17DOE
and64LyleBailie24
49
F 2534
F 3549
F 5064
F 65+
0
M 17Source:
24
Source:
Fig 3.3: Serious injuries by age band
M 2534
M 35- M 50- M 65+ F 17DOE
and64LyleBailie24
49
F 2534
F 3549
F 5064
DOE and LyleBailie
F 65+
Source:
DOE and LyleBailie
Fig 3.4: Change in licensed vehicles by age band of owner (2001-2011)
ChangeChange
in licensed
in licensed
vehiclesvehicles
by age band
by age
(2000band (20002011) 2011)
Fig 3.4: Change 4%
in licensed vehicles by age band of owner (2001-2011)
-
-
4%
2%
2%
0%
17-24
25-34
35-49
50-64
65+
17-24
25-34
35-49
50-64
65+
0%
-2%
Source:
-2%
DOE, LyleBailie and Oxford Economics
Source:
DOE, LyleBailie and Oxford Economics
Urbanisation and road speeds would be expected to be inter-linked and affect expected
deaths and injuries. Slower road speeds, associated with increased commuting or
Urbanisation and road speeds would be expected to be inter-linked and affect expected
urbanisation, should contribute to lower death and injury rates. Time series data on
deaths and injuries. Slower road speeds, associated with increased commuting or
average road speeds in NI is however severely limited and not fit for use in this study.
urbanisation, should contribute to lower death and injury rates. Time series data on
Although average road speed is one of Government’s Economic Development Forum
average road speeds in NI is however severely limited and not fit for use in this study.
(EDF) indicators under the infrastructure pillar, data is only collated and presented for
Although average road speed is one of Government’s Economic Development Forum
two single years. It is very difficult to estimate rates of urbanisation as this requires
(EDF) indicators under the infrastructure pillar, data is only collated and presented for
small area population statistics which are only available in Census years.
two single years. It is very difficult to estimate rates of urbanisation as this requires
small
areatravelled
population
statistics
only available
in Census
Distance
would
be awhich
betterarevariable
than number
of years.
vehicles licensed to
estimate ‘expected’ deaths and injuries as increased household second car-ownership
Distance travelled would be a better variable than number of vehicles licensed to
may result in falling average distance travelled per vehicle (though increased female
estimate ‘expected’ deaths and injuries as increased household second car-ownership
employment and commuting may offset this). Predicted deaths and injuries based on
may result in falling average distance travelled per vehicle (though increased female
registered vehicles rather than average distance travelled per vehicle could therefore
employment and commuting may offset this). Predicted deaths and injuries based on
lead to an over-estimation of potential deaths/ injuries. Unfortunately data limitations
registered vehicles rather than average distance travelled per vehicle could therefore
mean it is only possible at this stage to use average distance travelled as a separate
lead to an over-estimation of potential deaths/ injuries. Unfortunately data limitations
influence – recent evidence suggests average distance travelled has been fairly stable
mean it is only possible at this stage to use average distance travelled as a separate
(Fig 3.6).
influence – recent evidence suggests average distance travelled has been fairly stable
(Fig 3.6).
Economic Payback of Road Safety Advertising in NI
Economic Payback of Road Safety Advertising in NI
LicensedLicensed
vehiclesvehicles
(2000=100)
(2000=100)
130
110
90
70
Licensed
vehicles
(LHS axis)
Licensed
vehicles
(LHS axis)
Distance
travelled
(RHS axis)
Distance
travelled
(RHS axis)
130
110
110
90
90
70
70
50
70
50
1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Source:
DOE, LyleBailie and Oxford Economics
50
50
DistanceDistance
travelledtravelled
(2000=100)
(2000=100)
150
130
150
130
110
90
Fig 3.6: Average distance travelled per
vehicle
Fig 3.6: Average distance travelled per
14
vehicle
AverageAverage
distancedistance
travelledtravelled
per vehicle
per (000
vehicle (000
miles) miles)
Fig 3.5: Licensed vehicles and distance
travelled
Fig 3.5: Licensed vehicles and distance
150
150
travelled
Source:
1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Source: DOE, LyleBailie and Oxford Economics
3.3
Source:
13
14
12
13
11
12
10
11
9
10
8
9
7
8
6
7
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Summary
3.3
What this Summary
all means is that Oxford Economics broadly agree with the existing approach used by
LyleBailie, however with scope for:
What this all means is that Oxford Economics broadly agree with the existing approach used by
however
with scopefor
for:
•LyleBailie,
Adjusting
the Department
Transport UK economic cost per death and injury assumptions
in line with the UK: NI productivity differential (to better reflect the value of output lost to the
• Adjusting the Department for Transport UK economic cost per death and injury assumptions
NI economy)
in line with the UK: NI productivity differential (to better reflect the value of output lost to the
NI economy)payback results with and without the human cost element (to improve
• Presenting
comparisons with other payback studies)
• Presenting payback results with and without the human cost element (to improve
comparisons
withdeadweight
other payback
studies) for by factoring in the changing age profile of
• Improving
how
is accounted
drivers and change in average distance travelled per licensed vehicle, to better measure the
• Improving how deadweight is accounted for by factoring in the changing age profile of
net economic payback
drivers and change in average distance travelled per licensed vehicle, to better measure the
net stage,
economic
payback
At this
primarily
due to data limitations / the scope of what we have been asked to do, it
is not possible to factor in the following influences:
At this stage, primarily due to data limitations / the scope of what we have been asked to do, it
possible
to factor
in the following influences:
•is not
Average
road
speeds
•
Averagecollisions
road speeds
Where
occur given cost assumptions for urban and rural areas differ
•
Where collisions
given
cost of
assumptions
urban and
rural areas
differ actual deaths
Deaths
/ serious occur
injuries
by type
vehicle (i.e.foranalysis
of expected
versus
undertaken individually for cars, motorcycles etc)
Deaths / serious injuries by type of vehicle (i.e. analysis of expected versus actual deaths
undertaken individually for cars, motorcycles etc)
•
2011
Millward
Brown Annual Car Report Survey and
6
2000 2001
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Oxford
Economics
Millward Brown Annual Car Report Survey and
Oxford Economics
Economic Payback of Road Safety Advertising in NI
4
Enhanced Oxford Economics methodology
Based on the issues / areas for development identified in the previous chapter, below we
illustrate the approach that Oxford Economics has adopted to enhance the current approach to
measuring the economic impact of DOE’s road safety advertising campaign. We also identify in
Fig 4.1 additional influences that would be useful to include, but which we have not been able
to address directly in this piece of work.
4.1
Enhanced methodology stages
Fig 4.1: Oxford Economics road safety economic payback methodology
Information available
•Death/ serious injury rate per vehicle
at start of campaign (1992-1994)
•Average distance travelled per vehicle
(2000-2011)
• Age and gender of licensed drivers
(2000-2011)
Information available
• Actual deaths/ serious injuries 19952011
Actual deaths / serious
injuries
Information not currently available
• Urban-rural breakdown and vehicle
type breakdown of accidents
Expected deaths /
serious injuries
Death and
serious injury
saving
Information not currently available
•Average road speeds / urbanisation
•Urban-rural breakdown and vehicle
type breakdown of accidents
Information available
•NI: UK productivity differential
Cost per death and
serious injury
Key issue
•Include / exclude human cost element
Information not currently available
•Urban-rural breakdown of accidents
Total economic
saving
‘Wisdom of Crowds’
theory
ECONOMIC
PAYBACK
Information available
•Convert pubic expenditure
contribution to advertising campaign to
2005 prices
Economic Payback of Road Safety Advertising in NI
4.2
‘Expected’ deaths and serious injuries
The initial part of the model involved using existing historical information (1995-2011) on actual
deaths and serious injuries provided to us by LyleBailie from their Wisdom of Crowds research.
As can be seen in Fig 4.2 below, since 1986 the number of road deaths has declined even as
the number of licensed vehicles has been increasing. This has meant that the road death rate
per 10,000 vehicles has fallen sharply (Fig 4.4). As we mentioned earlier in the report, when
applying average rates for deaths and serious injuries, an average rate closest to when
the campaign was launched must be used. If expected death rates were based on the
1982-1994 average this would not be particularly representative of the campaign timeframe and
4
in our view over-estimate ‘expected’ deaths and injuries .
A similar trend is observed in Fig 4.3 with regards to licensed vehicles and serious injuries.
Although a significant rise in serious injuries occurred between 1986 and 1991 (this may be
explained by data issues) this trend then began to fall again despite a continued rise in licensed
vehicles. That said serious injuries have always remained substantially higher than the number
of deaths as we would expect.
Fig 4.2: Licensed vehicles and road deaths
1,200
250
Licensed vehicles
(LHS axis)
225
1,000
200
150
600
125
Road deaths
(RHS axis)
400
100
Road deaths
Licensed vehicles (000s)
175
800
75
50
200
25
0
0
1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Source:
4
DOE, LyleBailie and Oxford Economics
We have built a tool into our model allowing various sensitivity analyses to be conducted. 3 options for average death
and serious injury rates can be used, one based on 1982-1994 averages, the other for 1992-1994 averages (as used
by LyleBailie and which we also use) and we have also included a further option of solely 1994 rates, the most recent
before the campaign was initiated. Clearly each rate will have a different impact on the death/ serious injuries
estimated i.e. average rates based on 1982-1994 averages will estimate higher deaths and serious injuries than the
1992-1994 rate.
Economic Payback of Road Safety Advertising in NI
Fig 4.3: Licensed vehicles and serious injuries
1,200
2,600
Licensed
vehicles
(LHS axis)
2,200
2,000
1,800
800
1,600
1,400
600
1,200
Serious injuries
(RHS axis)
400
1,000
Serious injuries
Licensed vehicles (000s)
1,000
2,400
800
600
200
400
200
0
0
1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Source:
DOE and LyleBailie
Figure 4.4: Deaths and serious injuries per 10,000 licensed vehicles
5
60
Deaths per 10,000 vehicles
40
3
Deaths
(LHS axis)
30
2
20
1
Serious injuries
(RHS axis)
0
Injuries per 10,000 vehicles
50
4
10
0
1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Source:
DOE, LyleBailie and Oxford Economics
To enhance the estimation of ‘expected’ road deaths and serious injuries taking into greater
consideration deadweight effects, we include the following additional influences on ‘potential’
deaths and injuries:
•
Change in age profile and gender of licensed drivers; and
•
Change in average distance travelled per licensed vehicle
Economic Payback of Road Safety Advertising in NI
Economic Payback of Road Safety Advertising in NI
Change in age profile and gender of drivers
Change
in age
profile
and gender
drivers
As explained
in the
previous
chapter,ofmale
drivers aged 17-24 have the highest road death rate
per
capita
in
NI.
It
is
also
the
case
that
the
same
category
of male
highest
As explained in the previous chapter, male drivers
aged
17-24 have
the drivers
highest has
roadthe
death
rate
serious
injury
rate by
band
gender.
per capita
in NI.
It isage
also
theand
case
that the same category of male drivers has the highest
5
serious
injury rate by
age
band andagender.
Oxford Economics
has
developed
composite age-death/ serious injury rate index in order to
adjust the
‘expected’
road
death and
serious injury
estimates
for the
changing
age 5and
gender
in order
to
Oxford
Economics
has
developed
a composite
age-death/
serious
injury
rate index
profile
of drivers
given
relative
death and
ratesfor
differ
quite significantly
across
adjust the
‘expected’
roadthat
death
and serious
injuryinjury
estimates
the changing
age and gender
different
driver
profile ofdemographic
drivers given
thatgroups.
relative death and injury rates differ quite significantly across
different demographic
driver groups.
Change
in average distance
travelled
Change
in average
distance
travelled
It would be
appear sensible
that
expected road deaths and injuries would be directly linked 1 for
1
to
average
distance
travelled.
Using data
provided
and our
own assumptions,
It would be appear sensible that expected
road
deaths by
andLyleBailie
injuries would
be directly
linked 1 for
we
calculated
travelled
per by
licensed
vehicle
from
2000-2011
(we
1 to have
average
distanceaverage
travelled.distance
Using data
provided
LyleBailie
and our
own
assumptions,
assume
change 1995-2000
given notravelled
data is available)
and vehicle
indexed from
to 2000.
The annual
we havenocalculated
average distance
per licensed
2000-2011
(we
difference
from
2000
is
then
calculated
and
a
proportion
of
this
is
taken
as
impacting
on
assume no change 1995-2000 given no data is available) and indexed to 2000. The annual
expected
road
deaths/
serious
injuries
(factor
set
at
1).
difference from 2000 is then calculated and a proportion of this is taken as impacting on
expected road deaths/ serious injuries (factor set at 1).
4.3
Cost per death/ serious injury
4.3
Cost
perDepartment
death/ serious
injury Highway Economics Note, there are three costs
As defined
by the
for Transport
associated
road
death/ serious
injury. These
are lost
output, human
costs are
and three
ambulance
As defined with
by the
Department
for Transport
Highway
Economics
Note, there
costs
and
medic
costs.
As
discussed
in
chapter
3,
given
the
significant
size
of
the
human
cost
associated with road death/ serious injury. These are lost output, human costs and ambulance
element
(two-thirds
of
the
road
death
cost)
and
the
fact
that
this
type
of
cost
is
generally
not
and medic costs. As discussed in chapter 3, given the significant size of the human cost
captured
in other payback
analysis,
ourcost)
methodology
is designed
order
to facilitate
inclusion
element (two-thirds
of the road
death
and the fact
that this in
type
of cost
is generally
not
or
exclusion
of
this
human
cost.
captured in other payback analysis, our methodology is designed in order to facilitate inclusion
or exclusion
of this
In
addition to
the human
above,cost.
the enhanced model also accounts for the annual productivity
differential
the UK the
andenhanced
NI (average
of 0.9
1995-2011)
Oxford
Economics’
UK
In addition between
to the above,
model
also
accounts from
for the
annual
productivity
regional
model
whichthe
uses
AccountsofGVA
data and official
estimates.
differential
between
UK Regional
and NI (average
0.9 1995-2011)
from employment
Oxford Economics’
UK
The
associated
costs
outlined
in
the
Highways
Economic
note
are
then
adjusted
accordingly
to
regional model which uses Regional Accounts GVA data and official employment estimates.
account
for
this
difference.
The associated costs outlined in the Highways Economic note are then adjusted accordingly to
account for this difference.
4.4
Wisdom of Crowds and economic payback
4.4
Wisdom
ofaCrowds
and economic
Having now
reached
total economic
saving thepayback
next stage follows LyleBailie’s approach to
Wisdom
of Crowds.
that 23.03%
of next
respondents
rate LyleBailie’s
road safety approach
advertising
Having now
reached a Knowing
total economic
saving the
stage follows
to
campaigns
as
most
influential
in
death
/
injury
reduction,
this
percentage
is
applied
to
the
Wisdom of Crowds. Knowing that 23.03% of respondents rate road safety advertising
overall
economic
saving
to calculate
the monetary
value / economic
payback attributable
to the
campaigns
as most
influential
in death
/ injury reduction,
this percentage
is applied to
the
road
safety
campaign.
To
then
convert
this
as
a
return
to
every
£1
of
public
money
invested;
overall economic saving to calculate the monetary value / economic payback attributable to the
this
divided byTo
the
overall
costthis
of as
thea campaign
(net of
of £22.84m,
road value
safetyiscampaign.
then
convert
return to every
£1 sponsorship)
of public money
invested;
converted
to
2005
prices
using
the
Consumer
Price
Index
(CPI).
this value is divided by the overall cost of the campaign (net of sponsorship) of £22.84m,
converted to 2005 prices using the Consumer Price Index (CPI).
5
This measure is based on death per capita and serious injury per capita multiplied by the share of male/ female divers
within a particular age category. This is indexed to 2000=100 and the annual difference from 2000 is then calculated,
5
taking
a proportion
of thisonasdeath
impacting
on expected
road injury
deaths/
(set
0.5).
Ideally
further
research
is
This measure
is based
per capita
and serious
perserious
capita injuries
multiplied
byatthe
share
of male/
female
divers
required
to inform the
within a particular
ageassumed
category.factor
Thisofis0.5
indexed to 2000=100 and the annual difference from 2000 is then calculated,
taking a proportion of this as impacting on expected road deaths/ serious injuries (set at 0.5). Ideally further research is
Economic Payback of Road Safety Advertising in NI
5
Oxford Economics economic
enhanced methodology
payback
based
on
Oxford Economics’ model has been set up in such a way which can produce a variety of
sensitivity analyses, including ‘hitting’ the original LyleBailie payback estimate.
We have decided to present payback results for the following three scenarios (underlying
assumptions outlined):
1. LyleBailie original scenario (using 1992-1994 average road death and serious injury
rates)
2. Oxford Economics enhanced methodology scenario excluding the human cost
element of the Department for Transport cost parameters – 1992-1994 average road
death and serious injury rates; adjusting ‘expected’ deaths and serious injuries for the
change in age profile and gender of licensed drivers and the change in average distance
travelled per licensed vehicle; adjusting the Department for Transport cost parameters for
the NI:UK productivity differential; converting public expenditure on the road safety
advertising campaign to 2005 prices; and excluding the human cost element from the
Department for Transport cost parameters
3. Oxford Economics enhanced methodology scenario including the human cost
element of the Department for Transport cost parameters – as above but including the
human cost element from the Department for Transport cost parameters
By presenting these three scenarios, this will provide DOE / LyleBailie with an understanding of
how incorporating influences such as the change in age profile and gender of licensed drivers
and the change in average distance travelled per licensed vehicle impacts on expected deaths /
serious injuries and total economic saving. It will further highlight the significant impact that
excluding human costs has on the overall payback and also highlight the difference that
accounting for the UK/ NI productivity differential will have. The payback results for the three
scenarios are presented below:
Table 5.1: DOE road safety advertising campaign economic payback - alternate
scenarios
Original LyleBailie
Oxford Economics
enhanced methodology
scenario excluding the
human cost
Oxford Economics
enhanced methodology
scenario including the
human cost
5,406
1,042
4,183
% attributable to road safety advertising campaign
23.03%
23.03%
23.03%
Road safety economic payback (£m, 2005 prices)
1245.0
240.1
963.3
54
10
42
Total economic saving (£m, 2005 prices)
Economic payback ratio
Source:
Note:
Oxford Economics
Lyle Bailie public spend figure is measured in current prices
Table 5.1 shows that the economic payback ratio drops from 54 in the original LyleBailie
scenario to 42 using the enhanced Oxford Economics methodology (including the human cost
element), and drops significantly to 10 when the human cost element is excluded. It should be
noted that a payback ratio of 10 would still be considered high although it is difficult to make
comparisons across other public sector interventions due to the different nature of
interventions.
Economic Payback of Road Safety Advertising in NI
Table 5.2 below decomposes the differences into the individual components. This highlights
once again the impact of excluding the human cost element.
Table 5.2: Explaining differences - alternate scenarios
Road safety economic
payback (£m, 2005
prices)
% difference
Original LyleBailie
1245.0
-
Oxford Economics enhanced methodology scenario
excluding the human cost
240.1
-
Difference
1005.0
-
o/w change in age profile and gender of drivers
30.6
3%
o/w change in average distance travelled
88.6
9%
o/w applying NI:UK productivity differential
183.5
18%
o/w excluding human cost element
723.2
72%
-4.6
-
Difference economic payback ratio
o/w conversion public spend to 2005 prices
Source: Oxford Economics
Economic Payback of Road Safety Advertising in NI
6
Validating statement
As requested by LyleBailie, we have provided a validating statement below which can
accompany the payback analysis in relevant publications:
The underlying methodology used to produce an estimate of the economic payback of the
DOE’s road safety advertising campaign (1995-2010) has been developed by Oxford
Economics. Oxford Economics is one of the world’s leading providers of economic
advice, with over 300 clients including international organisations (such as the IMF and
World Bank), Government departments in the UK, US and Europe (including HM
Treasury, DTI and the Department for Transport), central banks (e.g. Bank of England),
as well as a large number of blue-chip companies across the whole industrial spectrum.
Oxford Economics’ methodology is based on an enhanced version of an original
methodology developed by LyleBailie International, which replicated the same approach
used in the Republic of Ireland for the Road Safety Authority. As such the Oxford
Economics methodology can be considered to be more advanced than used in other
jurisdictions.
Where possible the methodology attempts to adopt best practice by quantifying the net as
opposed to gross additional impact of the advertising campaign (i.e. accounts for
deadweight effects). It does this by factoring in exogenous influences on ‘expected’ road
death and serious injury rates. These include changes in the age and gender profile of
licensed drivers (statistical evidence for NI shows a large divergence in per capita road
accident rates for different demographic driver groups) and changes in average distance
travelled per licensed vehicle. Due to data limitations, it is not possible at this stage to
include in the enhanced methodology other influencing factors such as changes in
average road speeds, rates of urbanisation and commuting patterns (shifts to public
transport will indirectly be accounted for by average distance travelled per vehicle). In
addition the methodology could in future be developed by splitting road deaths and
serious injuries into (1) urban and rural (as where collisions occur has an influence on
assumed official cost assumptions); and (2) by vehicle type. While this increased
sophistication would likely have some impact on the estimate for payback, it is Oxford
Economics’ view that the difference would be relatively minor.
The economic cost parameters per road death and serious injury are taken directly from
the widely used and accepted UK Department for Transport’s Highways Economics Note
No. 1, 2005 Valuation of the Benefits of Prevention of Road Accidents and Casualties. To
the best of Oxford Economics’ knowledge, these are the standard cost parameters used
in road safety payback analysis and no other cost parameters exist. Given that the ‘lost
output’ element of the overall cost is based on value of output forgone, Oxford Economics
has adjusted the UK overall cost parameters using official NI:UK productivity (GVA per
employed person) differentials.
Allocating what proportion of the total net economic saving is attributable to the road
safety advertising campaign is based on survey evidence by Millward Brown on all policyinfluential factors which individuals consider have the greatest impact on road death /
serious injury reduction in NI.
If you would like to know more about this Report
or how to use psychological research to improve
road safety campaigns, please contact Fiona Rooney,
Psychology Director, LyleBailie International,
[email protected]
Telephone: 00 44 2890 331044
Fax: 00 44 2890 331622 www.lylebailie.com
If you would like consultancy advice on how to develop
a communications’ methodology for changing
road behaviour in conjunction with enforcement and
how to measure the road safety economic payback, please
contact David Lyle, Chief Executive, LyleBailie International,
[email protected]
Telephone: 00 44 2890 331044
Fax: 00 44 2890 331622 www.lylebailie.com
31 Bruce Street, Belfast BT2 7JD T 048 9033 1044 F 048 9033 1622 E [email protected] www.lylebailie.com
SPECIALISTS IN ATTITUDE & BEHAVIOUR CHANGE