FEEM working papers "Note di lavoro" series
2017 .015

A Novel Approach to Estimating the Demand Value of Road Safety


Authors: Christoph M. Rheinberger, Felix Schläpfer, Michael Lobsiger
Series: Economic Theory
Editor: Carlo Carraro
Keywords: Road Safety, Value of Life, Public Goods
JEL n.: H41, I38, J17

Abstract

We estimate the demand value of road safety improvements in Switzerland from survey data using a novel elicitation approach. Individuals’ responses to questions about how much public spending on road safety should be increased are combined with observations of income, tax rate, and road usage to estimate the economic value of a statistical accident avoided. Information obtained from a risk-risk tradeoff elicitation allows us to distinguish willingness-to-pay values for various degrees of accident severity. Our most comprehensive estimate of the value of a statistical accident avoided amounts to CHF 11.0 million ($11.6 million); the corresponding value per statistical life is close to CHF 4.2 million ($4.5 million). We explore the sensitivity of these estimates to anchoring and other framing effects and find that the popularity of specific road safety programs is influenced by both the availability of different choice options and the provision of partisan cues expressing political endorsement or opposition.

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Suggested citation:  Rheinberger, C. M.,  F.  Schläpfer, M. Lobsiger, (2017), 'A Novel Approach to Estimating the Demand Value of Road Safety', Nota di Lavoro 15.2017, Milan, Italy: Fondazione Eni Enrico Mattei

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