CAREER: Improving Road Safety and Supporting Infrastructure through Responsible Use of Driving Data

This Faculty Early Career Development Program (CAREER) award supports research that aims at investigating how the use of driving data for insurance should be governed to make roads safer and help support transportation infrastructure. Auto insurance prices have traditionally been based on factors such as age, location and driving history rather than detailed information about how people actually drive. However, modern vehicles increasingly collect information about driving behavior, such as speed, braking, and travel patterns. These data could be used to better understand driving risk and potentially reshape the insurance industry and the broader auto industry. Automakers and driving-data companies can now collect driving behavior information that enables more personalized insurance pricing and could help reduce the tremendous human and economic costs of traffic crashes. However, the potential benefits of driving data are limited by data use regulations and privacy concerns. This project directly seeks to address these concerns and examines how the rules governing the collection, sharing, and use of driving data in insurance should evolve. Moreover, it investigates whether road operators could become suppliers of driving data. This would improve the information available to insurers while helping address the longstanding challenge of civil infrastructure funding. This work serves the national interest by informing policy on road safety, privacy, and infrastructure investment. Moreover, through educational activities designed to strengthen engineering students’ understanding of economics and public policy, it contributes to the professional development of the nation’s next generation of transportation economists and engineers. Lastly, by engaging public and private sector decision makers, this project will produce relevant and actionable policy recommendations. The research combines theoretical and empirical analysis at the intersection of economics and transportation engineering. It centers on the emerging market that links drivers, automakers, insurers, and the firms collecting and selling driving-behavior data. By combining methods from game theory, industrial organization, transportation modeling and simulation, it achieves two key goals. First, it examines how the design of privacy and data-use regulations affects this emerging market. Specifically, it investigates how different regulations would affect (a) road safety, insurance prices, and social welfare; and (b) the relationships between automakers, insurers, and driving-data firms. Second, this project studies whether, under an appropriate regulatory regime, driving data could support infrastructure funding. Specifically, it quantifies the potential revenue from the sale of driving data by road operators and the impact of these sales on the insurance market. Overall, this project contributes to advancing data, transportation, and infrastructure policy while furthering our understanding of the connected mobility and insurance ecosystem. This award reflects NSF's statutory mission and has been deemed worthy of support through evaluation using the Foundation's intellectual merit and broader impacts review criteria.