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The existing evidence on the economic burden of road accidents on GDP focus mainly on developed countries. This paper addresses an important gap in the literature by investigating into the impact of road traffic accidents and injuries on GDP in the small island of Mauritius. Mauritius having perceived an important structural transformation over the past decades, is witnessing a rise in road accidents and injuries, which is a concern in terms of economic costs. In addition, it is a small island nation with limited road infrastructure, making it vulnerable to traffic congestion and accidents. The paper provides important insights for other island countries with similar geographic challenges. The Vector Error Correction Model (VECM) approach is used to assess the existence of a long-run relationship between road traffic accidents and GDP in Mauritius from 1980 to 2020. In addition to road crashes, different levels of injury severity linked to road accidents are evaluated. The results reveal that on average a 1% rise in road accidents leads to a 0.42% fall in real GDP. Further, a 1% rise in casualties linked to road accidents is likely to cause a 0.18% decline in GDP. While a long run relationship is established, there is no statistically significant impact of road accidents on GDP in the short-run.
Verena Tandrayen‐Ragoobur (2024) studied this question.
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