Inflation Volatility and Road Accidents: A Panel Analysis for Nigeria

Abstract

This study investigates the effect of inflation volatility on road traffic accidents across States in Nigeria, using a panel dataset spanning 2017 to 2020. Descriptive and inferential statistics were employed to analyse the data used in this study. Inflation volatility is computed using the rolling 
standard deviation method, while road traffic crashes were obtained from the National Bureau of Statistics. The random-effects estimator and Hausman-Taylor instrumental variable approach were employed to analyse panel data of 36 states and the Federal Capital Territory, Abuja. The study 
reveals that inflation volatility negatively affects road transport crashes across Nigerian states and reduces the number of reported cases in the North East and North Central regions. We also discovered that unemployment has a significant and positive impact on road transport crashes across states in all geopolitical zones in Nigeria. Further findings reveal that drug abuse significantly increases road transport crashes in the South-South region. Still, it does not significantly determine road transport crashes in other regions of the country. This study therefore concludes that aside from unemployment, inflation volatility should not be ignored when 
discussing road transport crashes in Nigeria. It is therefore recommended that there be better coordination between macroeconomic policy and road safety management in Nigeria.