The Economics of Railroad Safety

1. Front Matter

   Pages i-xiii

   PDF

2. Setting the Scene

   • Ian Savage

   Pages 1-9

3. Historical Trends

   • Ian Savage

   Pages 11-19

4. Public Policy

   • Ian Savage

   Pages 21-28

5. How Safe Are American Railroads?

   • Ian Savage

   Pages 29-32

6. Risk Evaluation

   • Ian Savage

   Pages 33-42

7. The Story so Far

   • Ian Savage

   Pages 43-46

8. Economic Theory of Bilateral Accidents

   • Ian Savage

   Pages 47-57

9. Highway Grade Crossings

   • Ian Savage

   Pages 59-72

10. Trespassers

    • Ian Savage

    Pages 73-78

11. Occupational Injuries

    • Ian Savage

    Pages 79-92

12. Benchmark Levels of Operational Safety

    • Ian Savage

    Pages 93-98

13. Market Power

    • Ian Savage

    Pages 99-103

14. Imperfect Information

    • Ian Savage

    Pages 105-112

15. Customer Rationality

    • Ian Savage

    Pages 113-114

16. Railroad Myopia

    • Ian Savage

    Pages 115-121

17. Externalities

    • Ian Savage

    Pages 123-129

18. Non-Regulatory Responses

    • Ian Savage

    Pages 131-138

19. Federal Safety Regulations

    • Ian Savage

    Pages 139-148

20. Evaluation of Regulations

    • Ian Savage

    Pages 149-164

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.

• Industrial Organization
• economic theory
• economics
• law and economics
• public policy
• regulation
• transportation

• Department of Economics and the Transportation Center, Northwestern University, USA

  Ian Savage

Policies and ethics