The value of forecast improvements: evidence from advisory lead times and vehicle crashes

Anand, Vaibhav (2022): The value of forecast improvements: evidence from advisory lead times and vehicle crashes.

Abstract

Advances in predictive technologies are improving forecasts of risk, but do better forecasts result in better risk management? Using data on winter forecasts and vehicle crashes from 11 states in the US, I investigate the value of improvements in forecast lead times. I show that winter advisories with longer lead times reduce crashes significantly, even when they are less accurate than advisories with shorter lead times. These benefits come from both the individual and institutional response to advisory lead times. When advisories arrive earlier, people visit fewer places, and snowplow crews increase the intensity of road maintenance operations.

• Item Type: MPRA Paper
• Language: English
• Keywords: weather; forecast; information; risk mitigation; vehicle crashes
• Subjects: D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D80 - General; D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D81 - Criteria for Decision-Making under Risk and Uncertainty; H - Public Economics > H4 - Publicly Provided Goods > H41 - Public Goods; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q50 - General; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q54 - Climate ; Natural Disasters and Their Management ; Global Warming; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q55 - Technological Innovation; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q58 - Government Policy; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R0 - General > R00 - General; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R4 - Transportation Economics > R41 - Transportation: Demand, Supply, and Congestion ; Travel Time ; Safety and Accidents ; Transportation Noise

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