Wisconsin is blessed with many great bicycle areas. In particular, Madison is very fortunate to have trails, bike lanes, and a great opportunity for bicyclists to use the roads for both commuting and recreation.
In a research study in Davis, California, (yes, the city that recently beat Madison for the bicycle hall of fame) it was determined that bicycle lanes do reduce the frequency of certain types of accidents.
The study compared Davis, which had bicycle lanes at the time, with Santa Barbara, which did not. The results showed a "protective effect for certain types of bike car collissions." These situations were: Cyclist exiting driveway, motorist exiting driveway, improper right turn by motorist, cyclist traveling against traffic, motorist overtaking cyclist.
The study also found an increase in rates of crash when a cyclist turned left into traffic.
The following reccomendations were made after conclusion of the study:
"Where bicycle lanes exist, riding should be restricted to the direction of motor vehicle travel. Paved riding surfaces should be mandatory for bicycle lanes, as well as a wide buffer zone (preferably > 2.0 m) between motor vehicle traffic and bicyclists, increasing in direct proportion to the speed of the motor vehicles. There is some speculatory data that bicycle lane widths should increase if rumble strips are used between motor and bicycle traffic zones40 so that bicyclists do not ride over the strips accidentally."
For the actual study, see: http://depts.washington.edu/hiprc/practices/topic/bicycles/bikelanes.html