The Value of Private Safety versus the Value of Public Safety

Magnus Johannesson, Per-Olov Johansson () and Richard M. O'Conor
Additional contact information
Per-Olov Johansson: Department of Economics, Postal: Stockholm School of Economics, P.O. Box 6501, 113 83 Stockholm, Sweden
Richard M. O'Conor: Department of Economics, Postal: Stockholm School of Economics, Box 6501, S-113 83 Stockholm, Sweden.

No 103, SSE/EFI Working Paper Series in Economics and Finance from Stockholm School of Economics

Abstract: In this study we report an attempt to measure the WTP of car owners for a reduction of the probability of being killed in a traffic accident. One group of respondents is offered a safety device to be installed in their car, while another group is offered a public safety program (improved road quality) which results in the same size risk reduction. In terms of the value of a statistical life, our results are very reasonable. Moreover, there is a strong positive correlation between the magnitude of the WTP for the private safety device and the risks a respondent faces in traffic. However, the WTP for the private safety device is higher than the WTP for the public safety measure. Drawing on a model developed by Jones-Lee (1991), we show that a pure altruist may, but need not, be willing to pay more for a private risk reduction than for a uniform risk reduction of the same magnitude. This is also true for a wealth-focused altruist. Still, our empirical results are surprising, and further empirical research seems warranted.

Keywords: Safety; willingness to pay; altruism; environment; traffic (search for similar items in EconPapers)
JEL-codes: D61 D91 H51 I10 I12 (search for similar items in EconPapers)
Pages: 18 pages
Date: 1996-02
References: Add references at CitEc
Citations: View citations in EconPapers (57)

Published in Journal of Risk and Uncertainty, 1996, pages 263-275.

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: The Value of Private Safety versus the Value of Public Safety (1996)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hhs:hastef:0103

Access Statistics for this paper

More papers in SSE/EFI Working Paper Series in Economics and Finance from Stockholm School of Economics The Economic Research Institute, Stockholm School of Economics, P.O. Box 6501, 113 83 Stockholm, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by Helena Lundin ().