Valuation of road safety effects in cost-benefit analysis
Cost-benefit analysis is a common method for evaluating the social economic impact of transport projects, and in many of these projects the saving of human lives is an issue. This implies, within the framework of cost-benefit analysis, that a monetary value should be attached to saving human lives. This paper discusses the [`]Value of a Statistical Life' (VoSL), a concept that is often used for monetising safety effects, in the context of road safety. Firstly, the concept of [`]willingness to pay' for road safety and its relation to the VoSL are explained. The VoSL approach will be compared to other approaches to monetise safety effects, in particular the human capital approach and [`]quality adjusted life years'. Secondly, methods to estimate the VoSL and their applicability to road safety will be discussed. Thirdly, the paper reviews the VoSL estimates that have been found in scientific research and compares them with the values that are used in policy evaluations. Finally, a VoSL study in the Netherlands will be presented as a case study, and its applicability in policy evaluation will be illustrated.
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- Drummond, Michael F. & Sculpher, Mark J. & Torrance, George W. & O'Brien, Bernie J. & Stoddart, Greg L., 2005. "Methods for the Economic Evaluation of Health Care Programmes," OUP Catalogue, Oxford University Press, edition 3, number 9780198529453.
- Ikuho Kochi & Bryan Hubbell & Randall Kramer, 2006. "An Empirical Bayes Approach to Combining and Comparing Estimates of the Value of a Statistical Life for Environmental Policy Analysis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 34(3), pages 385-406, July.
- Jan Anne Annema & Carl Koopmans & Bert Van Wee, 2006. "Evaluating Transport Infrastructure Investments: The Dutch Experience with a Standardized Approach," Transport Reviews, Taylor & Francis Journals, vol. 27(2), pages 125-150, June.
- James K. Hammitt, 2007. "Valuing Changes in Mortality Risk: Lives Saved Versus Life Years Saved," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 1(2), pages 228-240, Summer.
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