IDEAS home Printed from https://ideas.repec.org/a/ucp/jlawec/v38y1995i1p79-105.html
   My bibliography  Save this article

Rates of Time Preference and Consumer Valuations of Automobile Safety and Fuel Efficiency

Author

Listed:
  • Dreyfus, Mark K
  • Viscusi, W Kip

Abstract

This article estimates hedonic price models for automobiles using a data set on almost 3,000 households from the U.S. Department of Energy Residential Transportation Energy Consumption Survey. The standard hedonic models are generalized to recognize the role of discounting of fuel efficiency and safety, yielding an estimated rate of time preference ranging from 11 to 17 percent. This range includes the prevailing rate of interest for car loans in 1988 and is consequently consistent with market rates. Purchasers exhibit an implicit value of life ranging from $2.6 to $3.7 million, which is within the range found in the labor market as well as other market contexts. The model also estimates a significant price effect for auto injury risks and fuel efficiency. Copyright 1995 by the University of Chicago.

Suggested Citation

  • Dreyfus, Mark K & Viscusi, W Kip, 1995. "Rates of Time Preference and Consumer Valuations of Automobile Safety and Fuel Efficiency," Journal of Law and Economics, University of Chicago Press, vol. 38(1), pages 79-105, April.
    • Handle: RePEc:ucp:jlawec:v:38:y:1995:i:1:p:79-105
    DOI: 10.1086/467326
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1086/467326
    Download Restriction: Access to the online full text or PDF requires a subscription.
    File URL: https://libkey.io/10.1086/467326?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Moore, Michael J & Viscusi, W Kip, 1988. "The Quantity-Adjusted Value of Life," Economic Inquiry, Western Economic Association International, vol. 26(3), pages 369-388, July.
    2. Cowling, Keith & Cubbin, John, 1972. "Hedonic Price Indexes for United Kingdom Cars," Economic Journal, Royal Economic Society, vol. 82(327), pages 963-978, September.
    3. Moore, Michael J. & Viscusi, W. Kip, 1990. "Discounting environmental health risks: New evidence and policy implications," Journal of Environmental Economics and Management, Elsevier, vol. 18(2), pages 51-62, March.
    4. Houston, Douglas A, 1983. "Implicit Discount Rates and the Purchase of Untried, Energy-Saving Durable Goods," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 10(2), pages 236-246, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. John A. Cairns, 1994. "Valuing future benefits," Health Economics, John Wiley & Sons, Ltd., vol. 3(4), pages 221-229, July.
    2. Vasquez-Lavín, Felipe & Ponce Oliva, Roberto D. & Hernández, José Ignacio & Gelcich, Stefan & Carrasco, Moisés & Quiroga, Miguel, 2019. "Exploring dual discount rates for ecosystem services: Evidence from a marine protected area network," Resource and Energy Economics, Elsevier, vol. 55(C), pages 63-80.
    3. Georges Dionne & Paul Lanoie, 2002. "How to Make a Public Choice About the Value of a Statistical Life: The Case of Road Safety," Cahiers de recherche 02-04, HEC Montréal, Institut d'économie appliquée.
    4. James Hammitt & Jin-Tan Liu, 2004. "Effects of Disease Type and Latency on the Value of Mortality Risk," Journal of Risk and Uncertainty, Springer, vol. 28(1), pages 73-95, January.
    5. K. R. Shanmugam, 2011. "Discount Rate for Health Benefits and the Value of Life in India," Working Papers id:4524, eSocialSciences.
    6. Mark D. Agee & Thomas D. Crocker, 2002. "On Techniques to Value the Impact of Environmental Hazards on Children's Health," NCEE Working Paper Series 200208, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Sep 2002.
    7. Agamoni Majumder & S. Madheswaran, 2022. "Discounting Long-Term Job-Related Health Risks in the Context of Indian Workers," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 65(4), pages 1099-1120, December.
    8. Dionne, Georges & Lebeau, Martin, 2010. "Le calcul de la valeur statistique d’une vie humaine," L'Actualité Economique, Société Canadienne de Science Economique, vol. 86(4), pages 487-530, décembre.
    9. Bellavance, Franois & Dionne, Georges & Lebeau, Martin, 2009. "The value of a statistical life: A meta-analysis with a mixed effects regression model," Journal of Health Economics, Elsevier, vol. 28(2), pages 444-464, March.
    10. Thomas J. Kniesner & W. Kip Viscusi, 2023. "Compensating Differentials for Occupational Health and Safety Risks: Implications of Recent Evidence," Research in Labor Economics, in: 50th Celebratory Volume, volume 50, pages 83-116, Emerald Group Publishing Limited.
    11. Andrea Baranzini & Giovanni Ferro Luzzi, 2001. "The Economic Value of Risks to Life: Evidence from the Swiss Labour Market," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 137(II), pages 149-170, June.
    12. Gabriel Picone & Frank Sloan & Donald Taylor, 2004. "Effects of Risk and Time Preference and Expected Longevity on Demand for Medical Tests," Journal of Risk and Uncertainty, Springer, vol. 28(1), pages 39-53, January.
    13. Viscusi, W Kip & Aldy, Joseph E, 2003. "The Value of a Statistical Life: A Critical Review of Market Estimates throughout the World," Journal of Risk and Uncertainty, Springer, vol. 27(1), pages 5-76, August.
    14. Valerie Jarvis & S. J. Prais, 1997. "The Quality of Manufactured Products in Britain and Germany," International Review of Applied Economics, Taylor & Francis Journals, vol. 11(3), pages 421-438.
    15. Bommier, Antoine & Lanz, Bruno & Zuber, Stéphane, 2015. "Models-as-usual for unusual risks? On the value of catastrophic climate change," Journal of Environmental Economics and Management, Elsevier, vol. 74(C), pages 1-22.
    16. Round, Jeff, 2012. "Is a QALY still a QALY at the end of life?," Journal of Health Economics, Elsevier, vol. 31(3), pages 521-527.
    17. Wim Groot & Henriëtte van den Brink, 2003. "Sympathy and the Value of Health: The Spill-over Effects of Migraine on Household Well-being," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 61(1), pages 97-120, January.
    18. Ramírez Muñoz de Toro, Gonzalo R. & Uriarte, Juan I. & Delbianco, Fernando & Larrosa, Juan M.C., 2017. "Un modelo hedónico de precios en línea de automóviles usados en Argentina || A Hedonic Model of Online Prices of Used Cars in Argentina," Revista de Métodos Cuantitativos para la Economía y la Empresa = Journal of Quantitative Methods for Economics and Business Administration, Universidad Pablo de Olavide, Department of Quantitative Methods for Economics and Business Administration, vol. 24(1), pages 25-53, Diciembre.
    19. Stavins, Robert, 2004. "Environmental Economics," RFF Working Paper Series dp-04-54, Resources for the Future.
    20. Sylvain Prado, 2009. "The European used-car market at a glance: Hedonic resale price valuation in automotive leasing industry," Working Papers hal-04140873, HAL.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucp:jlawec:v:38:y:1995:i:1:p:79-105. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Journals Division (email available below). General contact details of provider: https://www.journals.uchicago.edu/JLE .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.