The Economics of Railroad Safety

235 Pages·1998·7.884 MB·English

by  Ian Savage (auth.)

The Economics of Railroad Safety
Transportation Research, Economics and Policy
VOLUME 7
Editorial Board
Yossi Berechman
Department of Economics & Public Policy, Tel Aviv University, Israel
Kenneth Small
Department of Economics, University of California at Irvine, U.S.A.
The titles published in this series are listed at the end of this volume.
The Economics of
Railroad Safety
By
IAN SAVAGE
Department of Economics and
the Transportation Center
Northwestern University
SPRINGER SCIENCE+BUSINESS MEDIA, LLC
Library of Congress Cataloging-in-Publication Data
Savage, Ian, 1960-
The economics of railroad safety / by Ian Savage.
p. cm. — (Transportation research, economics and policy ; v. 7)
Includes bibliographical references and index.
ISBN 978-1-4613-7548-7 ISBN 978-1-4615-5571-1 (eBook)
DOI 10.1007/978-1-4615-5571-1
1. Railroad accidents—United States. 2. Traffic safety—United States.
I. Title. II. Series.
HE1780.S28 1998
363.12,2'0973-dc21 98-8616
CIP
Copyright ® 1998 by Springer Science+Business Media New York
Originally published by Kluwer Academic Publishers in 1998
Softcover reprint of the hardcover 1st edition 1998
All rights reserved. No part of this publication may be reproduced, stored in
a retrieval system or transmitted in any form or by any means, mechanical,
photo-copying, recording, or otherwise, without the prior written permission of
the publisher, Springer Science+Business Media, LLC.
Printed on acid-free paper
In Memory of my Grandmother
Madge Lucy Grinyer
1911-1996
CONTENTS
Abbreviations ix
Preface xi
Acknowledgements xiii
1 Setting the Scene 1
2 Historical Trends 11
3 Public Policy 21
4 How Safe are American Railroads? 29
5 Risk Evaluation 33
6 The Story So Far 43
7 Economic Theory of Bilateral Accidents 47
8 Highway Grade Crossings 59
9 Trespassers 73
10 Occupational Injuries 79
11 Benchmark Levels of Operational Safety 93
12 Market Power 99
viii Ian Savage
13 Imperfect Information 105
14 Customer Rationality 113
15 Railroad Myopia 115
16 Externalities 123
17 Non-Regulatory Responses 131
18 Federal Safety Regulations 139
19 Evaluation of Regulations 149
20 A New Era for Safety Regulation 165
21 The Way Forward 197
Appendix A Federal Regulations 211
Appendix B Historical Data 217
References 219
Subject Index 227
ABBREVIATIONS
AAR Association of American Railroads
ASLRRA American Short Line and Regional Railroad Association
CFR Code of Federal Regulations
DOT United States Department of Transportation
EPA United States Environmental Protection Agency
FHWA United States Federal Highway Administration
FRA United States Federal Railroad Administration
GAO United States General Accounting Office
ICC United States Interstate Commerce Commission
NHTSA United States National Highway Traffic Safety
Administration
NTSB United States National Transportation Safety Board
OHSA United States Occupational Health and Safety
Administration
OTA United States Office of Technology Assessment
TRB Transportation Research Board
PREFACE
The American public has a fascination with railroad wrecks that goes back a long
way. One hundred years ago, staged railroad accidents were popular events. At
the Iowa State fair in 1896, 89,000 people paid $20 each, at current prices, to see
two trains, throttles wide open, collide with each other. "Head-on Joe" Connolly
made a business out of "cornfield meets" holding seventy-three events in thirty-six
years. Picture books of train wrecks do good business presumably because a train
wreck can guarantee a spectacular destruction of property without the messy loss
of life associated with aircraft accidents.
A "train wreck" has also entered the popular vocabulary in a most unusual way.
When political manoeuvering leads to failure to pass the federal budget, and a
shutdown is likely of government services, this is widely called a "train wreck. "
In business and team sports, bumbling and lack of coordination leading to a
spectacular and public failure to perform is also called "causing a train wreck." A
person or organization who is disorganized may be labelled a "train wreck. "
It is therefore not surprising that the public perception of the safety of railroads
centers on images of twisted metal and burning tank cars, and a general feeling that
these events occur quite often. After a series of railroad accidents, such as occurred
in the winter of 1996 or the summer of 1997, there are inevitable calls that
government "should do something. "
However, the reality of railroad safety is much different from the perception.
The major safety issues are not collisions or derailments, but rather occupational
injuries to employees, collisions with negligent road users at highway grade
crossings, and the general proclivity of people to trespass on the railroad. Contrary
to popular perception, accident rates have fallen throughout the twentieth century.
Employee injury rates are a third of those of a generation ago, and grade crossing
fatalities per automobile owned have fallen by half over the same period. It is ten
times safer to travel by train than to drive.
Yet the railroads are subject to considerable safety regulation. It may come as
somewhat of a shock to many readers to realize that much of this regulation is quite
recent. Back in those halcyon days when passenger trains were the primary means
of long-distance travel, the industry had little formal governmental regulation but
substantial self regulation. Then in 1970 the Federal Railroad Safety Act gave
government rulemaking authority over "all areas of railroad safety." Nowadays the
Code of Federal Regulations reads like an engineering textbook on how to build,
maintain and operate a railroad.
XlI Ian Savage
A generation ago, transportation economists were at the forefront of questioning
whether economic regulation of prices and quantity of service by government was
in the public interest. This book explores whether similar questions can be raised
about regulation of the quality of service: What is the justification for the current
safety regulations of the railroads? Why did it happen? Are the current regulations
in the public interest? Are there better alternatives?