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Is Transport Safety More Valuable in the Air?

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  • Fredrik Carlsson

    ()

  • Olof Johansson-Stenman
  • Peter Martinsson

Abstract

Using a contingent valuation survey, people's willingness to pay for a given risk reduction is found to be much larger, consistently more than two times as large, when traveling by air compared to by taxi. Follow-up questions revealed that an important reason for this discrepancy is that many experience a higher mental suffering from flying, and that they are willing to pay to reduce this suffering. It was also consistently found that people are willing to pay more for a certain risk reduction if the original price was higher. Policy implications are discussed.

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Bibliographic Info

Article provided by Springer in its journal Journal of Risk and Uncertainty.

Volume (Year): 28 (2004)
Issue (Month): 2 (03)
Pages: 147-163

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Handle: RePEc:kap:jrisku:v:28:y:2004:i:2:p:147-163

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Web page: http://www.springerlink.com/link.asp?id=100299

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  1. Andreoni, James, 1990. "Impure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving?," Economic Journal, Royal Economic Society, vol. 100(401), pages 464-77, June.
  2. Savage, Ian, 1993. " An Empirical Investigation into the Effect of Psychological Perceptions on the Willingness-to-Pay to Reduce Risk," Journal of Risk and Uncertainty, Springer, vol. 6(1), pages 75-90, January.
  3. W. Michael Hanemann, 1994. "Valuing the Environment through Contingent Valuation," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 19-43, Fall.
  4. Corso, Phaedra S & Hammitt, James K & Graham, John D, 2001. " Valuing Mortality-Risk Reduction: Using Visual Aids to Improve the Validity of Contingent Valuation," Journal of Risk and Uncertainty, Springer, vol. 23(2), pages 165-84, September.
  5. Kahneman, Daniel & Wakker, Peter P & Sarin, Rakesh, 1997. "Back to Bentham? Explorations of Experienced Utility," The Quarterly Journal of Economics, MIT Press, vol. 112(2), pages 375-405, May.
  6. Hammitt, James K & Graham, John D, 1999. "Willingness to Pay for Health Protection: Inadequate Sensitivity to Probability?," Journal of Risk and Uncertainty, Springer, vol. 18(1), pages 33-62, April.
  7. Kahneman, Daniel, 1992. "Reference points, anchors, norms, and mixed feelings," Organizational Behavior and Human Decision Processes, Elsevier, vol. 51(2), pages 296-312, March.
  8. Peter A. Diamond & Jerry A. Hausman, 1994. "Contingent Valuation: Is Some Number Better than No Number?," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 45-64, Fall.
  9. Jianakoplos, Nancy Ammon & Bernasek, Alexandra, 1998. "Are Women More Risk Averse?," Economic Inquiry, Western Economic Association International, vol. 36(4), pages 620-30, October.
  10. Kahneman, Daniel & Knetsch, Jack L., 1992. "Valuing public goods: The purchase of moral satisfaction," Journal of Environmental Economics and Management, Elsevier, vol. 22(1), pages 57-70, January.
  11. Fredrik Carlsson & Olof Johansson-Stenman, 2000. "Willingness to pay for improved air quality in Sweden," Applied Economics, Taylor & Francis Journals, vol. 32(6), pages 661-669.
  12. Hartog, Joop & Ferrer-i-Carbonell, Ada & Jonker, Nicole, 2002. "Linking Measured Risk Aversion to Individual Characteristics," Kyklos, Wiley Blackwell, vol. 55(1), pages 3-26.
  13. Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-58, December.
  14. Subramanian, Uma & Cropper, Maureen, 2000. " Public Choices between Life Saving Programs: The Tradeoff between Qualitative Factors and Lives Saved," Journal of Risk and Uncertainty, Springer, vol. 21(1), pages 117-49, July.
  15. McDonald, John F & Moffitt, Robert A, 1980. "The Uses of Tobit Analysis," The Review of Economics and Statistics, MIT Press, vol. 62(2), pages 318-21, May.
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Citations

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Cited by:
  1. Johansson-Stenman, Olof, 2006. "Mad Cows, Terrorism and Junk Food: Should Public Policy Reflect Subjective or Objective Risks?," Working Papers in Economics 194, University of Gothenburg, Department of Economics.
  2. Thijs Dekker & Roy Brouwer & Marjan Hofkes & Klaus Moeltner, 2011. "The Effect of Risk Context on the Value of a Statistical Life: a Bayesian Meta-model," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 49(4), pages 597-624, August.
  3. Andersson, Henrik & Svensson, Mikael, 2007. "Cognitive Ability and Scale Bias in the Contingent Valuation Method," Working Papers 2007:1, Swedish National Road & Transport Research Institute (VTI).
  4. Carlsson, Fredrik & Daruvala, Dinky & Jaldell, Henrik, 2013. "Do administrators have the same priorities for risk reductions as the general public?," Karlstad University Working Papers in Economics 7, Department of Economics, Karlstad University.
  5. Minhaj Mahmud, 2006. "Contingent Valuation of Mortality Risk Reduction in Developing Countries: A Mission Impossible?," Keele Economics Research Papers KERP 2006/01, Centre for Economic Research, Keele University.
  6. Hultkrantz, Lars & Svensson, Mikael, 2012. "The value of a statistical life in Sweden: A review of the empirical literature," Health Policy, Elsevier, vol. 108(2), pages 302-310.
  7. Angela Robinson & Judith Covey & Anne Spencer & Graham Loomes, 2007. "Are Some Deaths Worse Than Others? Results from a Discrete Choice Experiment," Working Papers 597, Queen Mary, University of London, School of Economics and Finance.
  8. Carlsson, Fredrik & Martinsson, Peter, 2004. "Willingness to Pay among Swedish Households to Avoid Power Outages - A Random Parameter Tobit Model Approach," Working Papers in Economics 154, University of Gothenburg, Department of Economics.
  9. Johansson-Stenman, Olof, 2003. "Should policy be concerned with objective or subjective risks?," Working Papers in Economics 93, University of Gothenburg, Department of Economics.
  10. Johansson-Stenman, Olof, 2008. "Mad cows, terrorism and junk food: Should public policy reflect perceived or objective risks?," Journal of Health Economics, Elsevier, vol. 27(2), pages 234-248, March.
  11. Hultkrantz, Lars & Svensson, Mikael, 2010. "The Economic Value of Preventing Fatalities: Recent evidence on the value of a statistical life in Sweden," Working Papers 2010:14, Örebro University, School of Business.
  12. Andersson, Henrik, 2006. "Willingness to Pay for Road Safety and Estimates of the Risk of Death: Evidence from a Swedish Contingent Valuation Study," Working Papers 2006:5, Swedish National Road & Transport Research Institute (VTI).
  13. Akay, Alpaslan & Martinsson, Peter & Medhin, Haileselassie & Trautmann, Stefan T., 2009. "Attitudes toward Uncertainty among the Poor: Evidence from Rural Ethiopia," IZA Discussion Papers 4225, Institute for the Study of Labor (IZA).

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