Abstract

This dissertation concerns the measurement and regulation of externalities with a focus on the numerous and interrelated external costs in the transportation sector. The research touches on pollution, congestion, and collisions as well as various modes of transportation. The results have important implications for public policy and the regulation of externalities both within and outside of transportation. Chapter 1 investigates the effectiveness of traffic laws which require drivers to provide a minimum amount of distance between their vehicle and cyclists when passing them on roadways in improving cyclist safety. Many believe these laws are ineffective in reducing the number of bicyclist fatalities because they are difficult for police to enforce, contain loopholes, and the minimum distance required is inadequate. This chapter tests this claim empirically using data on 18,534 bicyclist fatalities from the Fatality Analysis Reporting System and a differences-in-differences approach, in a negative binomial model, to identify the effect of minimum distance passing laws on bicyclist fatalities. The analysis fails to find a significant effect of enacting a minimum distance passing law on the number of cyclist fatalities after controlling for differences in weather, demographics, bicycling commuter rates, state level traffic, and time variation. Chapter 2 examines the effects of freight truck weight and miles traveled on both the quantity and severity of truck-involved collisions using a unique panel data set covering the universe of truck-involved collisions and 3.5 billion truck-weight observations. Estimates reveal that, though both measures of trucking activity can increase collisions, increases in truck weight skew the distribution of collisions towards more severe outcomes involving either injury or death. The results are applied to a welfare analysis of diesel fuel taxes, which have been shown to both reduce truck miles traveled and increase truck cargo weight. Though diesel taxes are shown to slightly reduce the total number of collisions, the remaining collisions become more severe. Societal gains from pollution, congestion, and collision reductions are entirely offset by the increased fatal collision costs, reducing total welfare by $39.9 billion annually. The final chapter examines the regulation of heterogeneous externalities. When demand for or damages from an externality producing good vary, uniform policy instruments are an inefficient tool for correcting market failures. This chapter examines how a policy that reflects this heterogeneity can improve efficiency. County travel demand elasticities and congestion damages are estimated to compare the efficiency of a uniform fuel tax to county-specific fuel taxes. Because elasticities, congestion damages, and pollution damages exhibit heterogeneity across regions, county-specific fuel taxes, levied in a subset of major metropolitan areas, provide welfare gains between $7-$26 per capita annually in addition to equity gains relative to a revenue neutral uniform fuel tax.