IDEAS home Printed from https://ideas.repec.org/p/hhs/vtiwps/2006_005.html
   My bibliography  Save this paper

Willingness to Pay for Road Safety and Estimates of the Risk of Death: Evidence from a Swedish Contingent Valuation Study

Author

Abstract

We examine how WTP for a reduction in road-mortality risk varies with different individual characteristics and how subjective mortality-risk estimates differ from objective (statistical) mortality-risk values. Using data from a Swedish contingent valuation study, we find some support that WTP declines with age and background risk, but we find no support that WTP varies with health status. Further, we find that respondents underassess their own mortality risks, both road- and total-mortality risks, compared to the objective risk measures for Sweden at the time of the survey.

Suggested Citation

  • Andersson, Henrik, 2006. "Willingness to Pay for Road Safety and Estimates of the Risk of Death: Evidence from a Swedish Contingent Valuation Study," Working Papers 2006:5, Swedish National Road & Transport Research Institute (VTI).
    • Handle: RePEc:hhs:vtiwps:2006_005
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    References listed on IDEAS

    as
    1. Arthur, W B, 1981. "The Economics of Risks to Life," American Economic Review, American Economic Association, vol. 71(1), pages 54-64, March.
    2. Eeckhoudt, Louis R. & Hammitt, James K., 2004. "Does risk aversion increase the value of mortality risk?," Journal of Environmental Economics and Management, Elsevier, vol. 47(1), pages 13-29, January.
    3. Corso, Phaedra S & Hammitt, James K & Graham, John D, 2001. "Valuing Mortality-Risk Reduction: Using Visual Aids to Improve the Validity of Contingent Valuation," Journal of Risk and Uncertainty, Springer, vol. 23(2), pages 165-184, September.
    4. Varian, Hal R, 1999. "Commentary on "Economic Preferences or Attitude Expressions?: An Analysis of Dollar Responses to Public Issues" by Kahneman et al," Journal of Risk and Uncertainty, Springer, vol. 19(1-3), pages 241-242, December.
    5. Fredrik Carlsson & Olof Johansson-Stenman & Peter Martinsson, 2004. "Is Transport Safety More Valuable in the Air?," Journal of Risk and Uncertainty, Springer, vol. 28(2), pages 147-163, March.
    6. Johannesson, Magnus & Johansson, Per-Olov & Lofgren, Karl-Gustaf, 1997. "On the Value of Changes in Life Expectancy: Blips versus Parametric Changes," Journal of Risk and Uncertainty, Springer, vol. 15(3), pages 221-239, December.
    7. Jones-Lee, M W & Hammerton, M & Philips, P R, 1985. "The Value of Safety: Results of a National Sample Survey," Economic Journal, Royal Economic Society, vol. 95(377), pages 49-72, March.
    8. Mishan, E J, 1971. "Evaluation of Life and Limb: A Theoretical Approach," Journal of Political Economy, University of Chicago Press, vol. 79(4), pages 687-705, July-Aug..
    9. 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.
    10. Richard Carson & Nicholas Flores & Norman Meade, 2001. "Contingent Valuation: Controversies and Evidence," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 19(2), pages 173-210, June.
    11. Richard T. Carson, 2011. "Contingent Valuation," Books, Edward Elgar Publishing, number 2489.
    12. Glenn C. Blomquist, 2004. "Self-Protection and Averting Behavior, Values of Statistical Lives, and Benefit Cost Analysis of Environmental Policy," Review of Economics of the Household, Springer, vol. 2(1), pages 89-110, March.
    13. Fuchs, Victor R & Zeckhauser, Richard, 1987. "Valuing Health--A "Priceless' Commodity," American Economic Review, American Economic Association, vol. 77(2), pages 263-268, May.
    14. Joseph E. Aldy & W. Kip Viscusi, 2004. "Age Variations in Workers' Value of Statistical Life," NBER Working Papers 10199, National Bureau of Economic Research, Inc.
    15. Janusz R. Mrozek & Laura O. Taylor, 2002. "What determines the value of life? a meta-analysis," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 21(2), pages 253-270.
    16. Eeckhoudt, Louis R & Hammitt, James K, 2001. "Background Risks and the Value of a Statistical Life," Journal of Risk and Uncertainty, Springer, vol. 23(3), pages 261-279, November.
    17. Smith, V. Kerry, 1992. "Arbitrary values, good causes, and premature verdicts," Journal of Environmental Economics and Management, Elsevier, vol. 22(1), pages 71-89, January.
    18. Anna Alberini, 2004. "Robustness of VSL Values from Contingent Valuation Surveys," Working Papers 2004.135, Fondazione Eni Enrico Mattei.
    19. 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.
    20. Johannesson, Magnus & Johansson, Per-Olov, 1996. "To Be, or Not to Be, That Is the Question: An Empirical Study of the WTP for an Increased Life Expectancy at an Advanced Age," Journal of Risk and Uncertainty, Springer, vol. 13(2), pages 163-174, September.
    21. repec:reg:rpubli:282 is not listed on IDEAS
    22. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2003. "Instrumental variables and GMM: Estimation and testing," Stata Journal, StataCorp LP, vol. 3(1), pages 1-31, March.
    23. Joseph E. Aldy & W. Kip Viscusi, 2008. "Adjusting the Value of a Statistical Life for Age and Cohort Effects," The Review of Economics and Statistics, MIT Press, vol. 90(3), pages 573-581, August.
    24. McDaniels, Timothy L, 1992. "Reference Points, Loss Aversion, and Contingent Values for Auto Safety," Journal of Risk and Uncertainty, Springer, vol. 5(2), pages 187-200, May.
    25. Rosen, Sherwin, 1988. "The Value of Changes in Life Expectancy," Journal of Risk and Uncertainty, Springer, vol. 1(3), pages 285-304, September.
    26. Viscusi, W Kip & Evans, William N, 1990. "Utility Functions That Depend on Health Status: Estimates and Economic Implications," American Economic Review, American Economic Association, vol. 80(3), pages 353-374, June.
    27. Benjamin, Daniel K & Dougan, William R, 1997. "Individuals' Estimates of the Risks of Death: Part I--A Reassessment of the Previous Evidence," Journal of Risk and Uncertainty, Springer, vol. 15(2), pages 115-133, November.
    28. Persson, Ulf & Norinder, Anna & Hjalte, Krister & Gralén, Katarina, 2001. "The Value of a Statistical Life in Transport: Findings from a New Contingent Valuation Study in Sweden," Journal of Risk and Uncertainty, Springer, vol. 23(2), pages 121-134, September.
    29. Blomquist, Glenn C, 1979. "Value of Life Saving: Implications of Consumption Activity," Journal of Political Economy, University of Chicago Press, vol. 87(3), pages 540-558, June.
    30. Johansson, Per-Olov, 2002. "On the Definition and Age-Dependency of the Value of a Statistical Life," Journal of Risk and Uncertainty, Springer, vol. 25(3), pages 251-263, November.
    31. Benjamin, Daniel K & Dougan, William R & Buschena, David, 2001. "Individuals' Estimates of the Risks of Death: Part II--New Evidence," Journal of Risk and Uncertainty, Springer, vol. 22(1), pages 35-57, January.
    32. Krupnick, Alan & Alberini, Anna & Cropper, Maureen & Simon, Nathalie & O'Brien, Bernie & Goeree, Ron & Heintzelman, Martin, 2002. "Age, Health and the Willingness to Pay for Mortality Risk Reductions: A Contingent Valuation Survey of Ontario Residents," Journal of Risk and Uncertainty, Springer, vol. 24(2), pages 161-186, March.
    33. V. Kerry Smith & Mary F. Evans & Hyun Kim & Donald H. Taylor, 2004. "Do the Near-Elderly Value Mortality Risks Differently?," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 423-429, February.
    34. Johannesson, Magnus & Blomquist, Glenn C. & Blumenschein, Karen & Johansson, Per-olov & Liljas, Bengt & O'Conor, Richard M., 1999. "Calibrating Hypothetical Willingness to Pay Responses," Journal of Risk and Uncertainty, Springer, vol. 18(1), pages 21-32, April.
    35. Liu, Jin-Tan & Hammitt, James K. & Liu, Jin-Long, 1997. "Estimated hedonic wage function and value of life in a developing country," Economics Letters, Elsevier, vol. 57(3), pages 353-358, December.
    36. Sloan, Frank A. & Kip Viscusi, W. & Chesson, Harrell W. & Conover, Christopher J. & Whetten-Goldstein, Kathryn, 1998. "Alternative approaches to valuing intangible health losses: the evidence for multiple sclerosis1," Journal of Health Economics, Elsevier, vol. 17(4), pages 475-497, August.
    37. Alberini, Anna & Cropper, Maureen & Krupnick, Alan & Simon, N.B.Nathalie B., 2004. "Does the value of a statistical life vary with age and health status? Evidence from the US and Canada," Journal of Environmental Economics and Management, Elsevier, vol. 48(1), pages 769-792, July.
    38. Hammitt, James K & Graham, John D, 1999. "Willingness to Pay for Health Protection: Inadequate Sensitivity to Probability?," Journal of Risk and Uncertainty, Springer, vol. 18(1), pages 33-62, April.
    39. Kahneman, Daniel & Knetsch, Jack L., 1992. "Valuing public goods: The purchase of moral satisfaction," Journal of Environmental Economics and Management, Elsevier, vol. 22(1), pages 57-70, January.
    40. Henrik Andersson, 2005. "The Value of Safety as Revealed in the Swedish Car Market: An Application of the Hedonic Pricing Approach," Journal of Risk and Uncertainty, Springer, vol. 30(3), pages 211-239, May.
    41. Baron, Jonathan, 1997. "Confusion of Relative and Absolute Risk in Valuation," Journal of Risk and Uncertainty, Springer, vol. 14(3), pages 301-309, May-June.
    42. Jones-Lee, Michael W, 1974. "The Value of Changes in the Probability of Death or Injury," Journal of Political Economy, University of Chicago Press, vol. 82(4), pages 835-849, July/Aug..
    43. Milton C. Weinstein & Donald S. Shepard & Joseph S. Pliskin, 1980. "The Economic Value of Changing Mortality Probabilities: A Decision-Theoretic Approach," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 94(2), pages 373-396.
    44. Johansson, Per-Olov, 2001. "Is there a meaningful definition of the value of a statistical life?," Journal of Health Economics, Elsevier, vol. 20(1), pages 131-139, January.
    45. Viscusi, W. Kip, 1985. "A Bayesian perspective on biases in risk perception," Economics Letters, Elsevier, vol. 17(1-2), pages 59-62.
    46. Beattie, Jane & Covey, Judith & Dolan, Paul & Hopkins, Lorraine & Jones-Lee, Michael & Loomes, Graham & Pidgeon, Nick & Robinson, Angela & Spencer, Anne, 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.
    47. Donald S. Shepard & Richard J. Zeckhauser, 1984. "Survival versus Consumption," Management Science, INFORMS, vol. 30(4), pages 423-439, April.
    48. Pratt, John W & Zeckhauser, Richard J, 1996. "Willingness to Pay and the Distribution of Risk and Wealth," Journal of Political Economy, University of Chicago Press, vol. 104(4), pages 747-763, August.
    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. Andersson, Henrik, 2013. "Consistency in preferences for road safety: An analysis of precautionary and stated behavior," Research in Transportation Economics, Elsevier, vol. 43(1), pages 41-49.
    2. Tanara Rosângela Vieira Sousa & Sabino Da Silva Pôrto Junior & João António Pereira & Flávio Pechansky & Paulina Do Carmo Arruda Vieira Duarte & Raquel De Boni, 2011. "Disposição A Pagar Pela Redução Do Riscode Mortalidade Associada A Acidentes De Trânsito E O Valor De Uma Vidaestatística," Anais do XXXVIII Encontro Nacional de Economia [Proceedings of the 38th Brazilian Economics Meeting] 078, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    3. Santos, Georgina & Behrendt, Hannah & Maconi, Laura & Shirvani, Tara & Teytelboym, Alexander, 2010. "Part I: Externalities and economic policies in road transport," Research in Transportation Economics, Elsevier, vol. 28(1), pages 2-45.
    4. Henrik Andersson, 2011. "Perception of Own Death Risk: An Assessment of Road‐Traffic Mortality Risk," Risk Analysis, John Wiley & Sons, vol. 31(7), pages 1069-1082, July.
    5. Henrik Andersson & James K. Hammitt & Kristian Sundström, 2015. "Willingness to Pay and QALYs: What Can We Learn about Valuing Foodborne Risk?," Journal of Agricultural Economics, Wiley Blackwell, vol. 66(3), pages 727-752, September.
    6. Thijs Dekker & Roy Brouwer & Marjan Hofkes & Klaus Moeltner, 2011. "The Effect of Risk Context on the Value of a Statistical Life: a Bayesian Meta-model," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 49(4), pages 597-624, August.
    7. Elvik, Rune, 2010. "A restatement of the case for speed limits," Transport Policy, Elsevier, vol. 17(3), pages 196-204, May.
    8. Henrik Andersson & James Hammitt & Gunnar Lindberg & Kristian Sundström, 2013. "Willingness to Pay and Sensitivity to Time Framing: A Theoretical Analysis and an Application on Car Safety," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 56(3), pages 437-456, November.
    9. Branden B. Johnson & Adam M. Finkel, 2023. "Sensitivity to scope in estimating the social benefits of prolonging lives for regulatory decisions using national stated preference tradeoffs," Environment Systems and Decisions, Springer, vol. 43(3), pages 509-528, September.
    10. Henrik Andersson & Petter Lundborg, 2007. "Perception of own death risk," Journal of Risk and Uncertainty, Springer, vol. 34(1), pages 67-84, February.
    11. Andersson, Henrik & Lundborg, Petter, 2006. "Perception of Own Death Risk: An Analysis of Road-Traffic and Overall Mortality Risks," Working Papers 2006:1, Swedish National Road & Transport Research Institute (VTI).

    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. Henrik Andersson & Nicolas Treich, 2011. "The Value of a Statistical Life," Chapters, in: André de Palma & Robin Lindsey & Emile Quinet & Roger Vickerman (ed.), A Handbook of Transport Economics, chapter 17, Edward Elgar Publishing.
    2. Henrik Andersson & James Hammitt & Gunnar Lindberg & Kristian Sundström, 2013. "Willingness to Pay and Sensitivity to Time Framing: A Theoretical Analysis and an Application on Car Safety," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 56(3), pages 437-456, November.
    3. Henrik Andersson, 2008. "Willingness to Pay for Car Safety: Evidence from Sweden," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 41(4), pages 579-594, December.
    4. Henrik Andersson & Mikael Svensson, 2008. "Cognitive ability and scale bias in the contingent valuation method," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 39(4), pages 481-495, April.
    5. Hultkrantz, Lars & Svensson, Mikael, 2012. "The value of a statistical life in Sweden: A review of the empirical literature," Health Policy, Elsevier, vol. 108(2), pages 302-310.
    6. Kip Viscusi, W. & Aldy, Joseph E., 2007. "Labor market estimates of the senior discount for the value of statistical life," Journal of Environmental Economics and Management, Elsevier, vol. 53(3), pages 377-392, May.
    7. Thijs Dekker & Roy Brouwer & Marjan Hofkes & Klaus Moeltner, 2011. "The Effect of Risk Context on the Value of a Statistical Life: a Bayesian Meta-model," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 49(4), pages 597-624, August.
    8. Andersson, Henrik, 2013. "Consistency in preferences for road safety: An analysis of precautionary and stated behavior," Research in Transportation Economics, Elsevier, vol. 43(1), pages 41-49.
    9. James K. Hammitt, 2020. "Valuing mortality risk in the time of COVID-19," Journal of Risk and Uncertainty, Springer, vol. 61(2), pages 129-154, October.
    10. Andrea Leiter, 2011. "Age effects in monetary valuation of reduced mortality risks: the relevance of age-specific hazard rates," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 12(4), pages 331-344, August.
    11. 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.
    12. Alberini, Anna & Chiabai, Aline, 2007. "Urban environmental health and sensitive populations: How much are the Italians willing to pay to reduce their risks?," Regional Science and Urban Economics, Elsevier, vol. 37(2), pages 239-258, March.
    13. James Hammitt & Kevin Haninger, 2010. "Valuing fatal risks to children and adults: Effects of disease, latency, and risk aversion," Journal of Risk and Uncertainty, Springer, vol. 40(1), pages 57-83, February.
    14. Cameron, Trudy Ann & DeShazo, J.R., 2013. "Demand for health risk reductions," Journal of Environmental Economics and Management, Elsevier, vol. 65(1), pages 87-109.
    15. Evans, Mary F. & Smith, V. Kerry, 2006. "Do we really understand the age-VSL relationship?," Resource and Energy Economics, Elsevier, vol. 28(3), pages 242-261, August.
    16. Antoine Bommier & Bertrand Villeneuve, 2012. "Risk Aversion and the Value of Risk to Life," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 79(1), pages 77-104, March.
    17. Maureen Cropper & James K. Hammitt & Lisa A. Robinson, 2011. "Valuing Mortality Risk Reductions: Progress and Challenges," Annual Review of Resource Economics, Annual Reviews, vol. 3(1), pages 313-336, October.
    18. Henry A. Roman & James K. Hammitt & Tyra L. Walsh & David M. Stieb, 2012. "Expert Elicitation of the Value per Statistical Life in an Air Pollution Context," Risk Analysis, John Wiley & Sons, vol. 32(12), pages 2133-2151, December.
    19. Joseph E. Aldy & W. Kip Viscusi, 2004. "Age Variations in Workers' Value of Statistical Life," NBER Working Papers 10199, National Bureau of Economic Research, Inc.
    20. Henrik Andersson & Mikael Svensson, 2014. "Scale sensitivity and question order in the contingent valuation method," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 57(11), pages 1746-1761, November.

    More about this item

    Keywords

    age; background risk; contingent valuation; health status; willingness to pay; risk perception; road safety;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:hhs:vtiwps:2006_005. 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: Biblioteket vid VTI or Emil Svensson or Claes Eriksson or Tova Äng (email available below). General contact details of provider: https://edirc.repec.org/data/tevtise.html .

    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.