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Report numberRA-2007-111
TitleThe valuation of fatal road casualties in Flanders
SubtitleResults from a contingent valuation study
AuthorsBram De Brabander
Published byPolicy Research Centre for Traffic Safety 2002-2006
Number of pages39
Date20/02/2007
ISBN
Document languageDutch
Partner(s)Universiteit Hasselt
Work packageOther: Enforcement and policy
Summary

Investments in road safety lead to a decrease in the number of accidents and the number of casualties. Resources to implement investments are not unlimited and have to result in the maximum return on investment. The most suitable investments can be identified with cost-benefit analyses or cost-effectiveness analyses. A cost-benefit analysis necessitates the explicit quantification of all relevant costs and benefits. For cost-effectiveness analyses this quantification is needed in case different effects (e.g. the avoidance of casualties with different injury levels) are included.

 

The benefits of the avoidance of fatal casualties are in this research project quantified through a contingent valuation. This methodology is the one which has led to the most empirical estimates in foreign studies. Based on individual interviews, a pre-test with 321 respondents was carried out. 1337 respondents participated in the final survey at the end of 2005.

 

The valuation question involved the purchase of an optional safety feature which improved the safety of the respondent (not passengers). The maximum willingness to pay for this safety feature was disclosed for different levels of initial risk and risk improvement. Respondents were asked to indicate their maximum willingness to pay on a payment card. In an open-ended follow up question respondents were given the possibility (but were not obliged to) to indicate an exact amount of their maximum willingness to pay. If a respondent provided an exact willingness to pay, then this amount was used in the analysis. If not, then the midpoint between the amount indicated on the payment card and the next amount was considered as the true exact willingness to pay. The population willingness to pay is estimated from an ordinary least squares regression (OLS) and a maximum likelihood estimation.

 

Two regression analyses were carried out with the OLS regression. In the first regression, the midpoint between the amount indicated on the payment card and the next higher amount was used as the willingness to pay if no exact willingness to pay was provided. This regression results in a population average willingness to pay of 5.673.486 Euro to avoid one fatal casualty. This value is to be considered as the true willingness to avoid one fatal casualty in Flanders from the contingent valuation methodology.

 

In a second regression the next higher amount on the payment card was used as the true willingness to pay if no exact amount was provided by the respondent. This regression results in a population average willingness to pay of 6.560.248 Euro. This can be considered as the reasonable upper bound of the estimated willingness to avoid one fatal road casualty. The possible bias by the use of the payment card appears nonexisting in our survey. Possibly, this is due to the use of the open-ended follow up question.

 

Concerning the impact of socio-demographic characteristics, we conclude that:

  • Individuals who most often make commuter related trips, show a higher willingness to pay.
  • Male individuals show a higher willingness to pay than females. This confirms earlier empirical findings.
  • The higher the level of education, the lower is the willingness to pay.
  • No significant impact on the willingness to pay of the level of age is found. This may be explained by the changing travel behaviour which was captured by another variable
     

Our estimates satisfy two validity tests:

  • A higher level of income leads to a higher willingness to pay.
  • A higher level of risk reduction results in a higher willingness to pay.
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The Policy Research Centre for Traffic Safety carries out policy relevant scientific research under the authority of the Flemish Government. The Centre is the result of a

cooperation between Hasselt University, KU Leuven and VITO, the Flemish Institute for Technological Research.

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