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A Comparison of Stated Preference Methods for the Valuation of Improvement in Road Safety

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  • Naghmeh Niroomand

    (Department of Economics, Eastern Mediterranean University, North Cyprus)

  • Glenn P. Jenkins

    (Queen's University, Canada and Eastern Mediterranean University, North Cyprus)

Abstract

This paper presents an empirical comparison of the contingent valuation method (CVM) and choice experiment (CE) method in the estimation of the non-market value of road safety improvements. In this study we used both the CVM and the CE method to identify the preferences and tradeoffs of automobile drivers in North Cyprus for road safety improvements. Mixed logit and payment ladder approaches were used to assess the driversÕ willingness to pay (WTP) for road safety improvements. Although the CVM yielded higher values than the CE, the differences between the estimates of WTP derived from these two methods were found to be statistically insignificant. The value of a statistical life (VSL) and the value of an injury (VI) were estimated for car accidents, and the value was found for the annual economic welfare loss from such deaths and injuries in North Cyprus. The point estimate of the value of a statistical life (VSL) expressed in euros is Û717,000, with the 95% confidence interval from Û315,293 to Û1,117,856, and the value of an injury (VI) is Û16,885, with the 95% confidence interval from Û5,603 to Û28,186. The point estimate of the VSL for North Cyprus obtained from this study was below Û1Êmillion, which places it among the bottom 30% of the estimates made internationally for these parameters. When aggregated over the whole country for 2014, the total annual economic welfare burden was Û46.7 million, which is equivalent to a economic welfare loss of 1.5% of the gross national product (GNP) of North Cyprus in that year.

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  • Naghmeh Niroomand & Glenn P. Jenkins, 2016. "A Comparison of Stated Preference Methods for the Valuation of Improvement in Road Safety," Development Discussion Papers 2016-10, JDI Executive Programs.
    • Handle: RePEc:qed:dpaper:292
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    More about this item

    Keywords

    Willingness to pay; contingent value model; choice experiment; road safety; car drivers;
    All these keywords.

    JEL classification:

    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • G13 - Financial Economics - - General Financial Markets - - - Contingent Pricing; Futures Pricing
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions

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