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The Annualized Social Cost of Motor-Vehicle Use in the United States, Based on 1990-1991 Data

UCD-ITS-RP-97-15

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Every year, American drivers spend hundreds of billions of dollars on highway transportation. They pay for vehicles, maintenance, repair, fuel, lubricants, tires, parts, insurance, parking, tolls, registration, fees, and other items. These expenditures buy Americans considerable personal mobility and economic productivity.

But the use of motor vehicles costs society more than the hundreds of billions of dollars spent on explicitly priced transportation goods and services. There also are bundled costs: those goods and services that are not explicitly priced, but rather are bundled in the prices of non transportation goods and services. For example, "free" parking at a shopping mall is unpriced, but it is not costless; the cost is included—bundled—in the price of goods and services sold at the mall. In addition to these priced or bundled private-sector costs, there are public-sector costs: the tens of billions of dollars spent every year to build and maintain roads, and to provide a wide range of services—police protection, the judicial and legal system, corrections, fire protection, environmental regulation, energy research and regulation, military protection of oil supplies, and more—that partly support motor vehicle use.

And finally, beyond these monetary public and private-sector costs are the nonmonetary costs of motor-vehicle use—those costs that are not valued in dollars in normal market transactions. There are a wide variety of nonmonetary costs, including the health effects of air pollution, pain and suffering due to accidents, and travel time. Some of these nonmonetary costs, such as air pollution, are externalities; others, such as travel time in uncongested conditions, are what I will call "personal" nonmonetary costs.

The total social cost of motor-vehicle use is the sum of all of the costs mentioned above: explicitly priced private-sector costs, bundled private-sector costs, public-sector costs, external costs, and personal nonmonetary costs.

Over the past three years, I and my colleagues at the University of California have been doing a detailed and comprehensive analysis of the total social cost of motor-vehicle use in the U. S. In this paper, I explain the purpose of estimating the total social-cost of motor-vehicle use, briefly review recent research, explain my conceptual framework and cost classification, and present and discuss our preliminary cost estimates.

In The Full Costs and Benefits of Transportation: Contributions to Theory, Method and Measurement, ed. David L. Greene, Donald W. Jones, and Mark A. Delucchi.