Title: Quantitative financial analysis for the estimation of road accident costs
Authors: Dimitrios Dimitriou; Thomas Poufinas
Addresses: Department of Economics, Democritus University of Thrace, University Campus, Komotini 69100, Greece ' Department of Economics, Democritus University of Thrace, University Campus, Komotini 69100, Greece
Abstract: The purpose of this paper is to study the effect of traffic accidents in the income generating capacity of the affected individuals and the resulting impact on their contribution back to the society and the state. The problem we address is the quantification in monetary terms of the loss of a human life as a result of a traffic accident. To estimate it we need to know what would have been the income generated by every individual for the remaining of their lives if the incident had not happened. We find the 'present value' of such income, adjusted for the probability of such an event (death) happening. As this resembles to the pure insurance premium, we employ insurance-based methods to mimic the calculation of the burning cost of an insurance policy covering death due to traffic accident and estimate the annual cost for the entire population and per capita.
Keywords: traffic accident; death; mortality; insurance; protection; pure insurance premium; economic loss; recovery.
International Journal of Decision Support Systems, 2017 Vol.2 No.4, pp.260 - 277
Accepted: 31 Mar 2017
Published online: 12 Jun 2018 *