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The value of statistical life in the context of road safety: new evidence on the contingent valuation/standard gamble chained approach

Author

Listed:
  • Fernando-Ignacio Sánchez-Martínez

    (University of Murcia)

  • Jorge-Eduardo Martínez-Pérez

    (University of Murcia)

  • José-María Abellán-Perpiñán

    (University of Murcia)

  • José-Luis Pinto-Prades

    (University of Navarra)

Abstract

This study estimates the value of statistical life (VSL) on a road traffic accident using the Contingent Valuation/Standard Gamble chained approach. A large representative sample (n = 2020) is used to calculate a VSL for use in the evaluation of road safety programmes in Spain. The paper also makes some methodological contributions, by providing new evidence about the consistency of the chained method. Our main results are: (1) A range from 1.3 million euro to 1.7 million euro is obtained for the VSL in Spain in the context of road accidents. This range is in line with the values used in the same context in other European countries, although it is lower than those obtained in different contexts and with other methods. (2) The method performs much better in terms of scope sensitivity than the traditional contingent valuation method, which asks subjects about their willingness to pay for very small reductions in the risk of death. (3) We introduce a new ‘indirect’ chaining approach which reduces (but does not remove) the disparity between direct and indirect chaining approaches. More extreme VSL estimates are still obtained with this indirect method than with the direct one. (4) VSL estimates depend on the injury used. More specifically, we obtained a lower VSL when a more severe injury is used. (5) Framing the risk of death in the modified standard gamble question as “10n in 10,000” instead of “n in 1000” influences the value of VSL. We attribute this effect to the Ratio Bias.

Suggested Citation

  • Fernando-Ignacio Sánchez-Martínez & Jorge-Eduardo Martínez-Pérez & José-María Abellán-Perpiñán & José-Luis Pinto-Prades, 2021. "The value of statistical life in the context of road safety: new evidence on the contingent valuation/standard gamble chained approach," Journal of Risk and Uncertainty, Springer, vol. 63(2), pages 203-228, October.
    • Handle: RePEc:kap:jrisku:v:63:y:2021:i:2:d:10.1007_s11166-021-09360-x
    DOI: 10.1007/s11166-021-09360-x
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    More about this item

    Keywords

    Value of statistical life; Contingent valuation; Standard gamble; Ratio bias effect;
    All these keywords.

    JEL classification:

    • J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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