Paradoxes of rationality in road safety policy
Rationality is an ideal for transport safety policy. As developed within normative welfare economics, rationality denotes the efficient use of safety measures based on cost–benefit analyses that include all relevant impacts of the measures. Efficiency in the technical sense of the term provides a perfectly clear and precise guideline for policy priorities. Nevertheless, some choices that are guided by cost–benefit analysis may strike us as paradoxical or counterintuitive. A paradox of rationality refers to any situation in which conflicting choices can both be defended as rational. This paper discusses a number of choices that may seem paradoxical. The first involves the choice between options that have identical impacts on safety, but in which these impacts are valued differently. The second deals with the tendency for preference reversals to occur when preferences for the provision of safety are aggregated. The third discusses the inability of conventional measures of willingness-to-pay to reflect the intensity of preferences. The fourth concerns the tendency for policy choice to favour the rich at the expense of the poor when willingness-to-pay is not adjusted for the marginal utility of money. A fifth situation refers to the fact that a policy option that looks attractive ex ante may fail an ex post compensation test because utility functions depend on health state. There is a potential conflict between individual and collective rationality with respect to the costs and benefits of some road safety measures. When developing a road safety programme, a set of road safety measures whose benefits exceed the costs when considered as stand-alone measures could have benefits smaller than cost when combined in a programme consisting of all the measures. Finally, there is a potential conflict between efficiency and negotiated consensus as mechanisms of resource allocation in the public sector. The sources of the paradoxes and ways of avoiding them are discussed. Some of the paradoxes can be avoided if changes in risk are valued in terms of a fixed price per unit of risk rather than according to a non-linear demand function.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 43 (2013)
Issue (Month): 1 ()
|Contact details of provider:|| Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/620614/description#description|
|Order Information:|| Postal: http://www.elsevier.com/wps/find/supportfaq.cws_home/regional|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Loomes, Graham, 2006. "(How) Can we value health, safety and the environment?," Journal of Economic Psychology, Elsevier, vol. 27(6), pages 713-736, December.
- Elvik, Rune, 1995. "Explaining the Distribution of State Funds for National Road Investments between Counties in Norway: Engineering Standards or Vote Trading?," Public Choice, Springer, vol. 85(3-4), pages 371-88, December.
- Broome, John, 1978. "Trying to value a life," Journal of Public Economics, Elsevier, vol. 9(1), pages 91-100, February.
- Bruno S. Frey & Alois Stutzer, 2001.
"What Can Economists Learn from Happiness Research?,"
CESifo Working Paper Series
503, CESifo Group Munich.
- Bruno S. Frey & Alois Stutzer, 2002. "What Can Economists Learn from Happiness Research?," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 402-435, June.
- Bruno S. Frey & Alois Stutzer, . "What can Economists Learn from Happiness Research?," IEW - Working Papers 080, Institute for Empirical Research in Economics - University of Zurich.
- Fridstrom, Lasse & Elvik, Rune, 1997. "The Barely Revealed Preference behind Road Investment Priorities," Public Choice, Springer, vol. 92(1-2), pages 145-68, July.
- Ulph, Alistair, 1982. "The role of ex ante and ex post decisions in the valuation of life," Journal of Public Economics, Elsevier, vol. 18(2), pages 265-276, July.
- Robert Sugden, 2005. "Coping with Preference Anomalies in Cost–Benefit Analysis: A Market-Simulation Approach," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 32(1), pages 129-160, 09.
- Hauer, E., 1994. "Can one estimate the value of life or is it better to be dead than stuck in traffic?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 28(2), pages 109-118, March.
- Johansson-Stenman, Olof & Martinsson, Peter, 2008. "Are some lives more valuable? An ethical preferences approach," Journal of Health Economics, Elsevier, vol. 27(3), pages 739-752, May.
- Rafael Di Tella & Robert MacCulloch, 2006. "Some Uses of Happiness Data in Economics," Journal of Economic Perspectives, American Economic Association, vol. 20(1), pages 25-46, Winter.
When requesting a correction, please mention this item's handle: RePEc:eee:retrec:v:43:y:2013:i:1:p:62-70. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.