IDEAS home Printed from https://ideas.repec.org/a/eee/retrec/v43y2013i1p62-70.html
   My bibliography  Save this article

Paradoxes of rationality in road safety policy

Author

Listed:
  • Elvik, Rune

Abstract

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.

Suggested Citation

  • Elvik, Rune, 2013. "Paradoxes of rationality in road safety policy," Research in Transportation Economics, Elsevier, vol. 43(1), pages 62-70.
  • Handle: RePEc:eee:retrec:v:43:y:2013:i:1:p:62-70
    DOI: 10.1016/j.retrec.2012.12.008
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0739885912002120
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.retrec.2012.12.008?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. 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.
    2. Robert Sugden, 2005. "Coping with Preference Anomalies in Cost–Benefit Analysis: A Market-Simulation Approach," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 32(1), pages 129-160, September.
    3. 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.
    4. 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.
    5. 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.
    6. Broome, John, 1978. "Trying to value a life," Journal of Public Economics, Elsevier, vol. 9(1), pages 91-100, February.
    7. 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 371-388, December.
    8. 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.
    9. Fridstrom, Lasse & Elvik, Rune, 1997. "The Barely Revealed Preference behind Road Investment Priorities," Public Choice, Springer, vol. 92(1-2), pages 145-168, July.
    10. Loomes, Graham, 2006. "(How) Can we value health, safety and the environment?," Journal of Economic Psychology, Elsevier, vol. 27(6), pages 713-736, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Glavic, Drazenko & Milos, Mladenovic & Luttinen, Tapio & Cicevic, Svetlana & Trifunovic, Aleksandar, 2017. "Road to price: User perspectives on road pricing in transition country," Transportation Research Part A: Policy and Practice, Elsevier, vol. 105(C), pages 79-94.
    2. Dionne, Georges & Desjardins, Denise & Angers, Jean-François, 2021. "Road safety for fleets of vehicles," Working Papers 21-3, HEC Montreal, Canada Research Chair in Risk Management.

    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. Abel Brodeur, 2012. "Smoking, Income and Subjective Well-Being: Evidence from Smoking Bans," Working Papers halshs-00664269, HAL.
    2. Senik, Claudia, 2009. "Direct evidence on income comparisons and their welfare effects," Journal of Economic Behavior & Organization, Elsevier, vol. 72(1), pages 408-424, October.
    3. Guven, Cahit & Senik, Claudia & Stichnoth, Holger, 2012. "You can’t be happier than your wife. Happiness gaps and divorce," Journal of Economic Behavior & Organization, Elsevier, vol. 82(1), pages 110-130.
    4. Brodeur, Abel & Connolly, Marie, 2013. "Do higher child care subsidies improve parental well-being? Evidence from Quebec's family policies," Journal of Economic Behavior & Organization, Elsevier, vol. 93(C), pages 1-16.
    5. Hajdu, Tamás & Hajdu, Gábor, 2011. "A hasznosság és a relatív jövedelem kapcsolatának vizsgálata magyar adatok segítségével [Examining the relation of utility and relative income using Hungarian data]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(1), pages 56-73.
    6. T. Lakshmanasamy, 2022. "Money and Happiness in India: Is Relative Comparison Cardinal or Ordinal and Same for All?," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 20(4), pages 931-957, December.
    7. Chun-Hung A. Lin & Suchandra Lahiri & Ching-Po Hsu, 2017. "Happiness and Globalization: A Spatial Econometric Approach," Journal of Happiness Studies, Springer, vol. 18(6), pages 1841-1857, December.
    8. Sergei Guriev & Ekaterina Zhuravskaya, 2009. "(Un)happiness in Transition," Journal of Economic Perspectives, American Economic Association, vol. 23(2), pages 143-168, Spring.
    9. Deckers Thomas & Falk Armin & Schildberg-Hörisch Hannah, 2016. "Nominal or Real? The Impact of Regional Price Levels on Satisfaction with Life," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 16(3), pages 1337-1358, September.
    10. William Betz & Nicole Simpson, 2013. "The effects of international migration on the well-being of native populations in Europe," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-21, December.
    11. Koch, Christian, 2013. "The Virtue Ethics Hypothesis: Is there a nexus between virtues and well-being?," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 80054, Verein für Socialpolitik / German Economic Association.
    12. Welsch, Heinz & Kühling, Jan, 2015. "Income comparison, income formation, and subjective well-being: New evidence on envy versus signaling," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 59(C), pages 21-31.
    13. Alejandro Cid & Daniel Ferres & Máximo Rossi, 2008. "Subjective Well-Being in the Southern Cone: Health, Income and Family," Documentos de Trabajo (working papers) 1308, Department of Economics - dECON.
    14. Ayse Y. Evrensel, 2015. "Happiness, economic freedom and culture," Applied Economics Letters, Taylor & Francis Journals, vol. 22(9), pages 683-687, June.
    15. Koen Decancq & Marc Fleurbaey & Erik Schokkaert, 2015. "Happiness, Equivalent Incomes and Respect for Individual Preferences," Economica, London School of Economics and Political Science, vol. 82, pages 1082-1106, December.
    16. Dickerson, Andy & Hole, Arne Risa & Munford, Luke A., 2014. "The relationship between well-being and commuting revisited: Does the choice of methodology matter?," Regional Science and Urban Economics, Elsevier, vol. 49(C), pages 321-329.
    17. Susana Ferreira & Mirko Moro, 2013. "Income and Preferences for the Environment: Evidence from Subjective Well-Being Data," Environment and Planning A, , vol. 45(3), pages 650-667, March.
    18. Ólafsdóttir, Thorhildur & Ásgeirsdóttir, Tinna Laufey & Norton, Edward C., 2020. "Valuing pain using the subjective well-being method," Economics & Human Biology, Elsevier, vol. 37(C).
    19. Luca Stanca, 2008. "The Geography of Economics and Happiness," Working Papers 140, University of Milano-Bicocca, Department of Economics, revised Jun 2008.
    20. Nestor Gandelman & Ruben Hernandez-Murillo, 2009. "The impact of inflation and unemployment on subjective personal and country evaluations," Review, Federal Reserve Bank of St. Louis, vol. 91(May), pages 107-126.

    More about this item

    Keywords

    Cost–benefit analysis; Road safety policy; Rationality; Paradox; Valuation;
    All these keywords.

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

    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:eee:retrec:v:43:y:2013:i:1:p:62-70. 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/620614/description#description .

    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.