Estimating the willingness to pay and value of risk reduction for car occupants in the road environment
In recent years there has been a re-focus on the valuation of a statistical life from the ex post or human capital method to an ex ante willingness to pay (WTP) approach. This is in part a recognition that we may have been undervaluing the cost of fatalities and injuries to society associated with crashes, but also a strong belief in the need to focus on establishing the amount, ex ante, that individuals are willing to pay to reduce the risk of exposure to circumstances that might lead to death or degree of injury on the road network. This study has developed a framework in which to identify the degree of preference heterogeneity in willingness to pay by individuals who are drivers or passengers in cars to avoid being killed or injured. A stated choice experiment approach is developed. The empirical setting is a choice of route for a particular trip that a sample of individuals periodically undertakes in Australia. The particular trip is described in enough detail to provide the respondent with a familiar market environment, providing all the relevant background information required for making a decision. Mixed logit models are estimated to obtain the marginal (dis)utilities associated with each influence on the choice amongst the attribute packages offered in the stated choice scenarios. These estimates are used to obtain the WTP distributions for fatality and injury avoidance, which are then aggregated to obtain estimates of the value of risk reduction (VRR), of which the fatality class is also known as the value of a statistical life (VSL).
Volume (Year): 43 (2009)
Issue (Month): 7 (August)
|Contact details of provider:|| Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/547/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.:
- Kenneth Train, 2003.
"Discrete Choice Methods with Simulation,"
Online economics textbooks,
SUNY-Oswego, Department of Economics, number emetr2, March.
- Beattie, Jane, et al, 1998. "On the Contingent Valuation of Safety and the Safety of Contingent Valuation: Part 1--Caveat Investigator," Journal of Risk and Uncertainty, Springer, vol. 17(1), pages 5-25, October.
- Ashenfelter, Orley, 2006.
"Measuring the Value of a Statistical Life: Problems and Prospects,"
IZA Discussion Papers
1911, Institute for the Study of Labor (IZA).
- Orley Ashenfelter, 2006. "Measuring the Value of a Statistical Life: Problems and Prospects," Economic Journal, Royal Economic Society, vol. 116(510), pages C10-C23, 03.
- Orley Ashenfelter, 2006. "Measuring the Value of a Statistical Life: Problems and Prospects," NBER Working Papers 11916, National Bureau of Economic Research, Inc.
- Orley Ashenfelter, 2005. "Measuring the Value of a Statistical Life: Problems and Prospects," Working Papers 884, Princeton University, Department of Economics, Industrial Relations Section..
- Gaudry, Marc J. I. & Jara-Diaz, Sergio R. & Ortuzar, Juan de Dios, 1989. "Value of time sensitivity to model specification," Transportation Research Part B: Methodological, Elsevier, vol. 23(2), pages 151-158, April.
- Mauricio Sillano & Juan de Dios Ort�zar, 2005. "Willingness-to-pay estimation with mixed logit models: some new evidence," Environment and Planning A, Pion Ltd, London, vol. 37(3), pages 525-550, March.
- Ferrini, Silvia & Scarpa, Riccardo, 2007. "Designs with a priori information for nonmarket valuation with choice experiments: A Monte Carlo study," Journal of Environmental Economics and Management, Elsevier, vol. 53(3), pages 342-363, May.
- Zsolt Sándor & Michel Wedel, 2002. "Profile Construction in Experimental Choice Designs for Mixed Logit Models," Marketing Science, INFORMS, vol. 21(4), pages 455-475, February.
- Kip Viscusi, W. & Magat, Wesley A. & Huber, Joel, 1991. "Pricing environmental health risks: survey assessments of risk-risk and risk-dollar trade-offs for chronic bronchitis," Journal of Environmental Economics and Management, Elsevier, vol. 21(1), pages 32-51, July.
- 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.
- Carthy, Trevor, et al, 1998. "On the Contingent Valuation of Safety and the Safety of Contingent Valuation: Part 2--The CV/SG "Chained" Approach," Journal of Risk and Uncertainty, Springer, vol. 17(3), pages 187-213, December.
When requesting a correction, please mention this item's handle: RePEc:eee:transa:v:43:y:2009:i:7:p:692-707. 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.