Estimation of the social costs of home i

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Accident Analysis and Prevention 43 (2011) 998–1002

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Accident Analysis and Prevention
journal homepage: www.elsevier.com/locate/aap

Estimation of the social costs of home injury: A comparison with estimates for
road injury
Michael D. Keall a,∗ , Jagadish Guria b , Philippa Howden-Chapman a , Michael G. Baker a
a
b

He Kainga Oranga/Housing and Health Research Programme, Department of Public Health, University of Otago, Wellington, New Zealand
New Zealand Institute of Economic Research, P.O. Box 3479, Wellington, New Zealand

a r t i c l e

i n f o

Article history:
Received 18 March 2010
Received in revised form 9 November 2010
Accepted 29 November 2010
Keywords:
Home injury

Road injury
Social cost
Value of statistical life
Injury pyramid
Cost–benefit analysis

a b s t r a c t
Home injury is thought to constitute a major health burden in most developed countries. However,
efforts to address this burden have been hampered by reluctance from outside agencies to interfere
with the home environment of individuals, even if it benefits the occupant’s safety. This paper outlines
cost–benefit evaluation methods established in the transport safety domain applied to home safety to
estimate the social cost of unintentional home injury in New Zealand. Estimates of costs imposed on
society by home injury can provide an important motivator for initiating research and programmes to
reduce home injury risk. Data sources used included mortality data, hospitalisation data and data on minor
injuries that required medical treatment, but not hospital admission. We estimated that unintentional
home injuries in New Zealand impose an annual social cost of about $NZ 13 billion (about $US 9 billion),
which is about 3.5 times the annual social cost of road injury. These estimates provide a rational evidence
base for decisions on housing-focused safety regulation or interventions that always carry some cost, and
therefore need to be weighed against the benefits of injuries potentially prevented.
© 2010 Elsevier Ltd. All rights reserved.

1. Background
The home is an important setting internationally for injury.
Studies show that in England and Wales, there were 3500 deaths
from injury in and around the home in 2002 (ONS, 2002), almost
70% of non-transportation deaths; in the US in 2007, an estimated
44% of reported medically treated injuries occurred in and around
the home (Chen et al., 2009). As a setting for injury, the home is
particularly important for young and older people. For example,
in New Zealand between 1989 and 1998, 53% of injury deaths and
55% of injury hospitalisations for children aged 0–4 years occurred
in the home (IPRU, 2002).
Injuries occurring at home reflect the wide range of activities
undertaken in that setting. For example, a New Zealand study of
1000 households found significant numbers of medically treated
burns, falls, insect bites/stings, strain due to lifting, injuries from
home maintenance, children playing, etc. (Keall et al., 2009). In
fact, almost half of these home injuries actually occurred outside
the house, in the yard or on steps and paths leading to the house
(Keall et al., 2009). The comparable proportion of home injuries

that occurred outside the house, as estimated from the US National

∗ Corresponding author. Tel.: +64 4 918 6794; fax: +64 4 389 5319.
E-mail addresses: Michael.Keall@otago.ac.nz (M.D. Keall), Jagadish@xtra.co.nz
(J. Guria), Philippa.Howden-Chapman@otago.ac.nz (P. Howden-Chapman),
Michael.Baker@otago.ac.nz (M.G. Baker).
0001-4575/$ – see front matter © 2010 Elsevier Ltd. All rights reserved.
doi:10.1016/j.aap.2010.11.027

Health Survey 2007, was 38% (Chen et al., 2009). The latter survey
also showed falls were the leading cause of medically treated injury
generally, and about 60% of falls occurred in the home (Chen et al.,
2009).
A rational basis for allocating resources to reduce injury is
cost–benefit analysis (Guria and Mara, 2000), which is widely used
for evaluating proposed regulations and policies and has also been
used in the housing domain to evaluate costs of housing interventions compared to associated health benefits (Chapman et al., 2009;
Preval et al., 2010). Quantifying the benefits of reducing mortality risks requires a monetised value of safety, which can be used
to compare the benefits with the economic costs of enacting the
policy. Such quantification commonly uses the value of a statistical life (VOSL). In New Zealand and in many other countries VOSL

is estimated from surveys based on residents’ willingness to pay
for a small society-wide risk reduction to prevent one premature
death. Willingness to pay for reduction in morbidity risk can be estimated as a proportion of the VOSL (Guria et al., 2003; Guria, 1993;
Jones-Lee and Loomes, 1995; Miller and Guria, 1991). These monetisation approaches have benefited from the considerable research
resources dedicated to transport and transport safety, out of which
context most benefit–cost analyses with respect to injury prevention arise. Even though VOSL is estimated based on scenarios of
changes in transport risk, it is valid to use the same value in other
settings, as is being done in the UK (Mason et al., 2009). This paper
describes an application of monetisation methods to the home
safety area to estimate levels of investment in home safety that

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M.D. Keall et al. / Accident Analysis and Prevention 43 (2011) 998–1002

would produce benefits that exceed their costs. We also construct
injury pyramids and compare overall home injury social costs with
those arising from road traffic injury.
The estimates have been made in the New Zealand setting,
which therefore reflect the willingness to pay to avoid injury of
that population. Nevertheless, the values should have some validity for other western countries. An advantage of the New Zealand

setting is that there exist reasonably complete data on injuries,
including relatively minor injuries due to the effectiveness of the
state-owned universal no-faults injury compensation insurer, the
Accident Compensation Corporation (ACC). Under this scheme, the
costs of medical services associated with an accident-related injury
are largely met by the state, whatever the circumstances of the
injury. Compensation for loss of income is provided under the same
scheme regardless of whether the injury is work-related or not.
Therefore victims of injury have little incentive to misrepresent
the setting or nature of the injury event when making a claim. As
a result, the ACC data base of injury claims has excellent coverage
of the population, even if the administrative data collected have
deficiencies in a surveillance role.
2. Methods
This section describes the data sources for assessing counts of
home injury and the methods and assumptions used to assign costs
to different severity levels of injury. Evaluating the benefits and
costs of different injury prevention approaches requires generally
straightforward calculations. The example we present below is that
of cost–benefit calculations applied to structural improvements to

the home as an injury prevention measure.
2.1. Data
Data sources included mortality and overnight hospital admission data from the New Zealand Health Information Service
(NZHIS), and Accident Compensation Corporation (ACC) data for
minor injuries. The hospitalisation counts excluded readmission for
the same accident (multiple admissions for a person with the same
accident date), and also excluded self-harm, assaults and transport accidents. The location of the accident was missing for 21%
of the non-transport hospitalisations and 13% of the non-transport
deaths. Injuries and deaths without a location specified were not
used in the analysis. A detailed study of ACC-reported injuries
classified as occurring at home showed that about 17% had been
misclassified as occurring in the home setting (Keall et al., 2009).
We did not adjust injury counts accordingly as other settings to
which ACC-reported injuries were coded may well have included a
similar proportion of home injuries. Injuries in the home setting
are likely to include a small proportion of occupational injuries
where the workplace was also the injured person’s home. “Serious”
injuries in this analysis are considered equivalent to overnight or
longer hospitalisations. The “minor” injuries were counts of injuries
requiring medical treatment, but not hospitalisation, as recorded by

the state universal no-fault injury insurer (ACC). ACC data included
both serious and minor injuries. These data also contained a small
proportion of intentional injuries, which are not separately coded
in the ACC system and can only sometimes be discriminated from
unintentional injuries by an examination of the text description
of the injury event. In contrast, hospitalisation and mortality data
have codes to indicate assault or self-harm and these injuries could
therefore be excluded from the analysis. Because of the social and
legal unacceptability of intentional injury, the hospitalisation and
mortality data will also include a small proportion of injuries that
were not unintentional, even when data with assault and self harm
codes are excluded.

999

We constructed pyramids for road injury and home injury to
provide a comparison of the proportions of injuries occurring at
different severity levels for these two settings. The road injury
pyramid used 2007 road injury data from police reported crashes,
hospitalisation data and ACC data for new claims from the Motor

Vehicle Account.
2.2. Estimation of costs
To estimate the benefit of a home safety improvement in terms
of injuries prevented, there are two main steps: (i) estimate the
social cost per injury; (ii) estimate the number of injuries saved per
year as a consequence of the home improvement. It was assumed
that a home improvement would reduce the numbers of fatalities,
serious injuries and minor injuries. The total benefit of the improvement can then be estimated to be the present value of the social
costs of injuries prevented over the lifetime of the improvement.
Since all the benefits accrue over time, the flows need to be converted to present (discounted) values using a discount rate. We
have used a 5% rate along with an 8% rate as a sensitivity analysis
variant, provided because views vary concerning the most appropriate rate. It can be argued that there should be more weight placed
on the 5% rate because the housing context is one of “social” investment, as the remediation of injury hazards yields a mixture of safety
and esthetic benefits over time. The New Zealand Treasury until
recently used a rate of 10%, but now suggests a “standard” rate of
8% and a rate for building investments of 6% (Chapman et al., 2009).
Put simply, the discount rate indicates the way that an injury prevented in one year in the future is regarded less importantly today.
If a discount rate of 8% is used and the lifespan of an improvement
is 15 years, then the present value of all benefits accrued is about
8.56 times the benefit per year. If the present value of benefits is

greater than the cost of a particular housing improvement, then the
improvement is regarded as cost beneficial.
2.3. Estimating average social cost per injury
The social cost of a home injury includes mainly the costs of
loss of life and life quality, medical costs and loss of output. The
value to society of loss of life is measured by the Value of Statistical
Life (VOSL). The loss of life quality on average due to serious and
minor injuries is estimated as 10% and 0.4% of the VOSL respectively
(Ministry of Transport, 2008). A VOSL that has been used in the NZ
transport sector is $(NZ) 3.352 million at June 2008 prices. Prices
shown in this paper are in New Zealand dollars. In February 2010,
the approximate exchange rate was $(NZ) 1.00 = $(US) 0.70.
For losses of life quality and output, we have used the social
costs per fatal, serious and minor injury as used for transport
safety evaluations (Ministry of Transport, 2008). While there may
be differences between traffic injuries and home injuries within
the serious and minor injury categories in terms of average injury
severity, the average values for losses of life quality and output were
derived for a wide range of severity levels. More precise estimates,
although desirable, are not feasible without conducting further

willingness to pay studies.
The VOSL includes the loss of output due to a premature death.
Therefore we do not add any further loss of output, as is the practice
in estimating social costs in the transport sector. However, some
injuries do not have any long-term impairment. The loss of output
during the temporary incapacitation for such injuries needs to be
added to the cost of loss of life quality. This cost was estimated
by the Ministry of Transport for traffic injuries as $1400 and $300
respectively on average per serious and minor injury (Ministry of
Transport, 2008).
The total medical cost of an injury should be estimated as the
lifetime cost due to that injury. For medical costs, the lifetime costs

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M.D. Keall et al. / Accident Analysis and Prevention 43 (2011) 998–1002

Fig. 1. Injury pyramids for home setting for the years 2003–2005 and for roads for the year 2007.

Table 1
Number of deaths due to home injuries in NZ (excluding assaults, self-harm and
transport accidents).
Year

Number of deathsa

2002
2003
2004
2005
2006

255
262
260
238
239

a

Source: NZ mortality data (February 2010).

of medical treatment and rehabilitation were estimated based on
costs estimated for workplace injuries, with the reservation that
home injuries may not have the same severity distribution as workplace injuries. The lifetime medical cost is estimated by ACC only
for workplace injuries. We compared the first year total cost for
workplace and home injuries. In the absence of more precise information, we assume that the relativity between the first year total
costs in these two categories of injuries would hold for the relativity of lifetime medical costs between these two injury categories.
While we have estimated the value of loss of life quality separately for serious and minor injuries, we have estimated the lifetime
medical costs averaged over all non-fatal injuries.

3. Results
For workplace injuries, the average first year total cost (medical
and other costs) per injury claim in 2008 was estimated as $1165.
The average first year total cost per ACC-reported home injury was
about $550 at June 2008 prices. This is about 47% of the average total
cost per workplace injury. The average lifetime medical cost per
workplace injury at 2008 prices was estimated as $891. Assuming
the relativity between first year total cost and lifetime medical cost
per injury observed for workplace injuries holds for home injuries,
the estimated lifetime medical cost per home injury at 2008 prices
can be estimated to be about $421 on average.

Table 2
Estimated number of serious and minor home injuries in New Zealand.
Yeara
2003
2004
2005
2006
2007

Number of serious injuriesb
16,270
15,645
15,958
17,088
17,598

Number of minor injuriesc
372,010
456,778
533,876
595,167
649,187

a
For serious injuries, this is the calendar year; for minor injuries, this is July of
given year until the following June.
b
NZHIS data on hospital admissions from home injury but ignoring multiple
admissions for the same injury date.
c
ACC new claims data for injuries occurring in the home, minus the number of
hospitalisations.

Table 1 shows the number of fatalities from injury in the home,
excluding assaults, suicides and transport accidents.
Table 2 shows counts of unintentional injuries at home that
resulted in overnight hospitalisations, used as an estimate of the
number of serious injuries, and Accident Compensation Corporation (ACC) data used to derive counts of minor injuries. As
hospitalised injuries are theoretically included in the ACC data, the
counts of hospitalised injuries were subtracted from the counts of
ACC-reported injuries to estimate the number of minor injuries.
Fig. 1 summarises the information shown in the previous tables
for the years 2003–2005 for home injury and compares the same
information for New Zealand road injury using 2007 data (Ministry
of Transport, 2008). It shows rounded figures to simplify the presentation of relationships between the counts at the three severity
levels: for each home injury fatality, there were on average 63
hospitalised home injuries and 1960 minor injuries; for each road
injury fatality, there were on average 10 hospitalised injuries and
106 minor injuries. For home injuries, each fatal injury only makes
up about 0.05% of all home injuries but the cost associated with
fatal injuries makes up about 6% of the total social cost, when the
social costings as shown in Table 3 are used. Despite the large number of minor injuries in the home, they only constitute about 50%
of the total social cost of home injury.

Table 3
Estimated social costs for home injury at 2008 prices (NZ dollars), together with weighted average social cost for a single home injury based on data 2003–06. Overall costs
are weighted average per home injury per year and total aggregated annual social costs (last column).
Injury type

VOSL or loss of
life quality

Estimated medical
costs per injury

Estimated loss of output
due to temporary
incapacitation

Social cost per
injury excluding
medical costs

Total annual social
cost (millions)

Fatal
Serious
Minor
Serious and minor
Overall

$3.352 million
$335,200
$13,408

–

–
$1400
$300

$3.352 million
$336,000
$13,708

$837
$5466
$6710
$213a
$13,226

a

Medical costs of serious and minor injuries only.

$421
$26,141

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1001

Fig. 2. Injury reduction required to justify specified costs of home injury hazard remediation at 8%, 5% and 3% discount rates.

Using the values described above for loss of life and life quality, loss of output and medical costs, our estimate of social cost
per home injury on average is about $26,141 at June 2008 prices
(see Table 3). This average is estimated from the total social cost of
home injury in New Zealand, a weighted sum of the social costs estimated for the different severities of injuries shown in the rightmost
column of Table 3, divided by the total number of injuries.
Also shown in Table 3 is the estimated total annual social cost
of home injury in New Zealand, over $13 billion at 2008 prices. The
average social cost of a road injury was estimated to be $77,500
and the total social cost to be $3.84 billion (Ministry of Transport,
2008), consistent with a much higher average severity of injury,
but much fewer injuries overall. As an indication of the relative
severity of overnight hospitalisations for road and home injury, we
compared the distributions for length of stay in hospital for the
years 2003–2005. Mean length of stay was higher for road injury,
5.8 days, than for home injury, 4.4 days, but the distributions were
highly skewed. The 75th percentiles of the distributions were identical at 6 days, but the higher percentiles were somewhat higher for
road injury.
3.1. An example of cost–benefit analysis
An important unknown in the cost–benefit calculation is the
proportion of injuries that may be prevented by a measure such as a
structural injury hazard remediation. The social costs of the injuries
prevented are the benefits identified in the benefit–cost analysis.
In practice, the proportion of injuries prevented by some measure
can be extremely difficult to estimate robustly. For this reason, it
can be useful to consider the levels at which the benefits would
equal the costs, a common threshold for deciding whether an injury
prevention measure is worthwhile or not. Fig. 2 shows various costs
of injury hazard remediation in the horizontal axis, with the level of
injury reduction required for a benefit–cost ratio of 1 (with benefits
equalling costs) indicated for three discount rates: 3%, 5% and 8%.
There were 1.5 million New Zealand households according to the
2006 Census (Statistics New Zealand, 2007), so we estimated from
Tables 1 and 2 that there were approximately 0.14 home injuries
per household annually. The required injury reduction shown in
Fig. 2 is calculated to be:
cost of remediation per home
.
20 × present value of annual home injuries per home

As noted above, the total benefit of the remediation was estimated
to be the present value of the social costs of injuries prevented
over the lifetime of the remediation, estimated to be 20 years in
this example (the 20 in the denominator of the above equation).
Provision of a handrail for steps or stairs is an example of such
a remediation. Fig. 2 shows that, at the conservative 8% discount
rate, about 1% of injuries need be prevented by an intervention
costing $370 for that intervention to be considered cost–beneficial.
Of course, more durable improvements would yield greater overall
benefits and higher benefit–cost ratios.
4. Discussion
A previous New Zealand study looked at associations between
structural home injury hazards that were systematically enumerated in a sample of homes and the rate of injuries occurring in
homes with different numbers of hazards (Keall et al., 2008). For
each additional home injury hazard enumerated, it was estimated
that there was an associated increase in the odds ratio of a home
injury occurrence of 22% (with 95% CI: 6–41%). This result suggests
that addressing structural injury hazards in the home may be effective in reducing home injury, but has the limitation that it is just a
measure of association. In fact, to date there have been no studies of
adequate size and quality to provide evidence of the effectiveness
of structural home hazards remediation (Lyons et al., 2006). If the
lower confidence limit from the previously cited NZ study (6%) is
used as a lower bound for an estimated reduction in home injury
rates per additional injury hazard, then the cost–benefit equation
illustrated in Fig. 2 indicates that the expenditure of more than
$2000 per house would be justified.
This present study has some limitations. First, the cost of home
injury has been estimated for an “average” home injury, calculated
according to the home injury pyramid presented in Fig. 1. The severity of the injury will vary according to the forces involved and the
fragility of the person injured. For example, an injury pyramid for
falls on the level by young adults would probably be even more
dominated by minor injuries than Fig. 1, with relatively few fatalities. As shown in Fig. 1, road traffic injuries have a much more
top-heavy pyramid, dominated by the more serious injuries. These
differences in the proportions of injuries of different severities
obviously affect the social cost of the average injury. Fatal road
injuries constituted 0.9% of all injuries but imposed 37% of the
total road injury social costs, based on 2007 data and using 2008

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M.D. Keall et al. / Accident Analysis and Prevention 43 (2011) 998–1002

prices (Ministry of Transport, 2008). The average social cost we presented for home injury was for all injuries occurring at home, for
all mechanisms and all age groups. A related issue is that different
interventions have different effects on particular severity levels. For
example, provision of window guards for second storey and higher
windows would have a greater impact on hospitalised injuries of
young children than on minor injuries, due to the severity of the
impacts of falls from such heights. Cost–benefit analysis of such an
intervention should ideally use higher benefits that accrue from
preventing higher severity injuries than a simple average social
cost.
There are also limitations in the way that injury costs have been
estimated. While there may be differences between traffic injuries
and home injuries within the serious and minor injury categories
in terms of average injury severity, the average values for losses
of life quality and output were derived for a wide range of severity
levels. Similar comments apply to the relative severity of home and
workplace injuries. More precise estimates, although desirable, are
not feasible without conducting further Willingness to Pay studies.
Lastly, the estimated total social costs of injury are highly dependent on the VOSL estimates that have been used. Nevertheless, the
use of the same metric across both the housing and road injury
settings does at least allow comparability, and the same means of
comparison could be extended to other injury settings.
The total social cost of home injury has not been calculated
before for New Zealand and has rarely been published for other
jurisdictions. One exception is an estimate of total social costs of
unintentional home injury in the US (Zaloshnja et al., 2005). That
study estimated an annual 1998 cost of at least $217 billion, of
which about 16% were costs of fatal injuries. The lower proportion
of our estimate due to fatal injuries (only 6%) may be at least partially a result of our inclusion of the large number of minor injuries,
whose data were derived from the ACC system. Other jurisdictions
may have similar levels of home injury rates of lower severity, but
adequate surveillance is lacking for reporting these injuries.
As noted above, the home environment is considered a primarily private space in which individuals are considered free to
determine aspects of their environment, even those that are potentially detrimental to their safety. There are limits to this freedom,
mainly when there are consequential externalities such that the
health and safety of other people are seriously threatened. The willingness to pay to reduce private domain risks has been shown to
be considerably higher than that for public domain risks by various studies (Svensson and Vredin-Johansson, 2010). The work of
Paul Slovic and colleagues shows that those who are vulnerable are
understandably more risk averse than those with more material
resources and may be more attached to safer places, such as their
homes, where they can access resources through local networks
(Slovic, 1987).
Our estimate that the social costs of home injury are about
3.5 times the social costs of road injury should motivate efforts
to reduce this injury burden, but does not necessarily imply that
3.5 times the resources currently devoted to road injury prevention should be allocated to home injury prevention. Expenditure
on preventive measures is justified in terms of the injuries able to
be prevented rather than the sheer size of the injury burden. It is
unlikely that the home injury setting is as amenable to injury prevention efforts as the road injury setting. A major barrier to progress
in this area is the very limited evidence base of effective measures
to reduce home injury (Keall et al., forthcoming). Research to identify effective prevention measures is absolutely crucial to reduce
the disturbingly high social cost imposed on society.

To conclude, we have outlined the methods and the results of
a study estimating both the injury pyramid and the social costs
of home injuries using social cost estimates established in the
transport injury field. We consider that such estimates form an
important part of any evaluation of injury prevention campaigns,
policies and interventions as they provide a rational basis for directing resources. There is currently a lack of emphasis placed on
benefit–costs analyses in health research, which limits the ability
of governments and agencies to develop sound policy (Drummond
et al., 2008). The disturbing magnitude of the annual social cost of
home injuries, which we estimate to be about $(NZ) 13 billion, must
be a motivating factor for injury prevention efforts.
Acknowledgements
Thanks to ACC for providing funding for the Taranaki Home
Injury Hazards Study, of which the current analysis formed a part,
and to Jane Zhang for extracting hospitalisation and mortality data
for this project. The opinions expressed in this paper are those of
the authors and do not necessarily represent those of any other
agency.
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