The accident externality of driving: Evidence from observance of the Jewish Sabbath in Israel

We document and measure an externality of driving, whereby a driver's decision to take to the road affects fellow drivers risk of accident. Because religious Jews refrain from driving during the Sabbath, traffic on Israeli roads decreases sharply when the Sabbath begins each Friday, at a precisely defined time before sundown, and increases after the Sabbath ends on Saturday evening, at a precisely defined time after sunset. Using plausibly exogenous variation in traffic volume associated with the Sabbath, we estimate the effect of traffic volume on the risk of fatal or injurious accident. We find that a positive accident externality emerges only at the Sabbath exit, when traffic volumes are greater. Remarkably similar results arise when the analysis is confined to non-Jewish drivers, whose travel choices are not bound by the precise timing of the Sabbath, supporting the interpretation that our findings reflect an externality. Finally, the effect emerges mainly on a class of road sections that is considered highly perilous, suggesting that the interaction of traffic volume and road perilousness is important for understanding this issue and shaping implicated policy.