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The value of improved road safety
Örebro University, Department of Business, Economics, Statistics and Informatics.ORCID iD: 0000-0003-1172-1076
Örebro University, Department of Business, Economics, Statistics and Informatics.
2006 (English)In: Journal of Risk and Uncertainty, ISSN 0895-5646, E-ISSN 1573-0476, Vol. 32, no 2, p. 151-170Article in journal (Refereed) Published
Abstract [en]

We report the results of a contingent valuation study for finding a conservative estimate of the value-of-statistical-life in an urban road safety context in Sweden. We estimate the value of both a private-good device and a public-good safety program. The reduction of risk is communicated with a “community analogy” representation of the “Vision Zero” target of the national traffic-safety policy. According to this target, the road-traffic system should be designed so as to prevent accidents when they happen to lead to fatalities or severe injuries. We use the “certainty approach” for ex-post correction of results to remove or mitigate hypothetical bias of responses. As expected we find insensitivity of responses in the full sample to the size of the risk reduction being valued. By our approach we can compute a conservative estimate, based on answers from fully confident respondents, of the value of the largest possible safety enhancement (i.e. fulfilment of the “Vision Zero”). This lower bound estimate indicates a higher average willingness-to-pay for public safety-improving measures than currently assumed in benefit-cost assessments. We also find that the willingness to pay is considerably lower within a public-good than a private-good framework and a weak indication of sensitivity to scale among the most confident respondents.

Place, publisher, year, edition, pages
2006. Vol. 32, no 2, p. 151-170
National Category
Economics
Research subject
Economics
Identifiers
URN: urn:nbn:se:oru:diva-3182DOI: 10.1007/s11166-006-8291-zISI: 000237503400004Scopus ID: 2-s2.0-33646696193OAI: oai:DiVA.org:oru-3182DiVA, id: diva2:137267
Available from: 2006-11-17 Created: 2006-11-17 Last updated: 2017-10-06Bibliographically approved
In thesis
1. Valuation and pricing of traffic safety
Open this publication in new window or tab >>Valuation and pricing of traffic safety
2006 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

This thesis consists of six essays covering the topic of valuation and pricing of accidents. In the first essay a theory of the external marginal cost of accidents is presented. The external cost is dependent on the value of statistical life, the proportion internal cost and the so called risk elasticity, i.e. the relationship between traffic flow and accident risk. The two following essays present CV-studies on value of statistical life. Both CV-studies are based on the community approach built on the Swedish Vision Zero and ask respondents about their willingness-to-pay for absolute safety from fatal and severe accidents in one city.

The first study focuses on the problem of scope and hypothetical bias and shows that ex post calibration based on respondents’ certainty in answering the WTP question reduces the willingness-to-pay with up to 30% for a public good. Based on these certain responses a lower bound VSL value is presented of SEK 53 million for a private good and 20 million for a public good. The second essay discusses the topic of nonselfish preferences and willingness-to-pay for children’s safety as well as for relatives and friends. The essay suggests that WTP for children safety is higher than private safety and that a WTP for the safety of relatives and friends is prevailing. Also this essay shows a big difference between the WTP for a private good and for a public good. The two following essays estimate the risk elasticity for railway level crossing accidents as well as for heavy goods vehicles in Sweden. Both essays find that the risk decreases with increased traffic i.e. negative risk elasticity. The last essay presents the result from a field experiment with speed related charges and bonuses. The experiment shows that internalisation of the external accident cost through speed related economic incentives strongly will affect drivers choice of speed. It is proposed that this can be achieved on a voluntary basis.

Place, publisher, year, edition, pages
Örebro: Örebro universitetsbibliotek, 2006. p. 42
Series
Örebro Studies in Economics, ISSN 1651-8896 ; 13
Keywords
Value of statistical life, Marginal cost pricing, External cost, Risk elasticity, Pricing policies, Traffic accidents, Railway accidents, Heavy goods vehicle accidents
National Category
Economics
Research subject
Economics
Identifiers
urn:nbn:se:oru:diva-787 (URN)91-7668-509-8 (ISBN)
Public defence
2006-12-08, Bion, Forumhuset, Fakultetsgatan 1, Örebro, 10:00
Opponent
Supervisors
Available from: 2006-11-17 Created: 2006-11-17 Last updated: 2017-10-18Bibliographically approved

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Hultkrantz, Lars

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