Forecasting Road Fatalities by the Use of Kinked Experience Curve
Int. J. Data Analysis Techniques and Strategies, Vl. 5, No. 4, 2013
33 Pages Posted: 30 Jul 2010 Last revised: 7 Jan 2014
Date Written: January 17, 2011
According to the World Health Organization, more than one million road traffic deaths occur every year throughout the world. Many countries have established quantified road safety targets in response. Road safety targets need to be based on reliable forecasting methods. This paper attempts to develop such forecasting models for 13 OECD countries based on the data available from 1970 to 2007.
Deploying the methodology of both classical and kinked experience curves, we obtained the averaged experience slope of 55% from the kinked experience curve in contrast to 68.6% from the classical experience curve. The averaged standard deviation and R2 calculated also show better fit to the data for the kinked analysis.
For the two simulated forecasting periods, we, then, calculate mean absolute percentage error (MAPE) to measure forecasting accuracy. In comparing the MAPEs, we find that forecasting accuracy for the kinked models is significantly higher.
Finally, we use our kinked models to forecast the road fatalities for 13 countries through 2030. All the countries will experience a considerable reduction in their road fatality rates. The averaged fatality rate of 7.94 in 2010 for these 13 countries is projected to decline to 5.83 in 2020 and 4.54 in 2030.
Keywords: Road Fatalities, Experience Curve, Kinked Experience Curve
JEL Classification: R41, R48
Suggested Citation: Suggested Citation