Asymmetric preferences for road safety: Evidence from a stated choice experiment among car drivers

Flügel, Stefan; Elvik, Rune; Veisten, Knut; Rizzi, Luis Ignacio; Meyer, Sunniva Frislid; Ramjerdi, Farideh; Ortúzar, Juan de Dios

doi:10.1016/j.trf.2015.04.001

Cited by 6 publications

(7 citation statements)

References 28 publications

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“…In that case, it cannot be guaranteed that the function will satisfy the properties of prospect theory. Nevertheless empirical evidence (Kahneman and Tversky, 1979;Flügel et al, 2015;among others) shows no statistically significant differences between both exponents (they, however, considered utility functions defined piecewise and established the reference frames a priori).…”

Section: A Smooth Twice-differentiable Utility Function For Non-compensatory Loss-averse Decision-makingmentioning

confidence: 96%

“…While most applications simply consider the reference point to be equal to the status-quo (e.g. de Borger and Fosgerau, 2008;Flügel et al, 2015), in many cases this information is not available. Further, it is established that reference frames do not only depend on the status-quo, but also on the individuals' expectations (K} oszegi and Rabin, 2006), previous experiences (Brown, 1995), the choice-set they face (Zeelenberg and Pieters, 2007), and, eventually, other circumstances.…”

Section: Theoretical Frameworkmentioning

confidence: 99%

“…regret theory; Loomes and Sugden, 1982). Challenging the classic economic assumptions about utility and its impact is felt in fields from marketing (Hardie et al, 1993;Ho et al, 2006) to labor economics (Dunn, 1996;Fehr et al, 2009), as well as medicine (Rizzo and Zeckhauser, 2003;Sokol-Hessner et al, 2012), safety (Flügel et al, 2015), and transportation (de Borger and Fosgerau, 2008;Dixit et al, 2015), among many others.…”

Section: Introductionmentioning

confidence: 99%

“…de Borger and Fosgerau, 2008;Thiemann, 2017), which allows for clearly differentiating gains from losses and using different functional forms to include them in the expected utility functions. Normally, the reference points are assumed to be equal to the status quo (Flügel et al, 2015). At first glance, it appears to be a sound assumption, when it is possible to identify the current conditions (for instance, when dealing with repeated choices).…”

Section: Introductionmentioning

confidence: 99%

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Estimating the reference frame: A smooth twice-differentiable utility function for non-compensatory loss-averse decision-making

Bahamonde-Birke

2018

Journal of Choice Modelling

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Since the introduction of prospect theory, reference-dependence and loss-aversion have become widely acknowledged as important elements affecting decision-making. Nevertheless, establishing and determining reference frames are not extensively analyzed in the literature; rather, in most applications, it is simply assumed that the reference frames can be represented through the status quo. This assumption, however, may lead to biased results, as not only the status quo affects reference frames, but also previous experiences or expectations, among many others. Therefore, it would be more appropriate to estimate the reference frame directly as an unobserved latent variable. Unfortunately, current utility functions utilized to depict this kind of behavior are not useful for this purpose, as they are defined piecewise. This work proposes a smooth twicedifferentiable utility function that indeed allows estimating reference frames. Further, this function satisfies all major properties of prospect theory. Finally, the approach is tested relying on three case studies. They show that in the context of semi-compensatory loss-averted decisionmaking reference frames may diverge from the status quo.

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Section: A Smooth Twice-differentiable Utility Function For Non-compensatory Loss-averse Decision-makingmentioning

confidence: 96%

Section: Theoretical Frameworkmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Estimating the reference frame: A smooth twice-differentiable utility function for non-compensatory loss-averse decision-making

Bahamonde-Birke

2018

Journal of Choice Modelling

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“…Many studies in the past used the contingent valuation (CV) method in the road accidents context (Jones_Lee et al, 1995;Beattie et al, 1998;Carthy et al, 1999;Hammit and Graham (1999); Persson et al, 2001). More recently, stated choice experiments (SCE) have been increasingly employed to estimate such values (De Blaeij et al, 2002;Rizzi and Ortúzar, 2003, 2006a, 2006bIragüen andOrtúzar, 2004, Hojman et al, 2005;Hensher et al, 2009;Veisten et al, 2013;Flügel et al, 2015).…”

Section: Introductionmentioning

confidence: 99%

Estimating the value of risk reductions for car drivers when pedestrians are involved: a case study in Spain

et al. 2016

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We estimated the benefits associated with reducing fatal and severe injuries from traffic accidents using a stated choice experiment where choice situations were generated through a statistically efficient design. Specifically, the risk variables were defined as the expected annual number of vehicle car-users that suffered their death or were severely injured in a traffic accident. In addition, and differing from previous research, the number of pedestrians that died or were severely injured in traffic accidents per year was also included as a risk attribute in the choice experiment, to attempt at measuring drivers' willingness to pay to reduce the risk of hitting pedestrians in a crash.The empirical setting was a choice of route for a particular trip that a sample of car drivers periodically undertakes in Tenerife, Spain. Models were estimated accounting for random taste heterogeneity and pseudo-panel data correlation. The median of the distribution of simulated parameters was used to obtain a representative measure for the monetary valuation of risk reductions. We found that the ratio between the values of reducing the risk of suffering a serious injury and that of reducing a fatality was approximately 18%. Further, and quite novel, we also found that the value of reducing a pedestrian fatality was 39% of the value of reducing a car occupant fatality.

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Risk perception of earthquakes: Modeling conception of willingness to pay and prospect theory

Chou¹,

Lin²,

Yang³

et al. 2022

International Journal of Disaster Risk Reduction

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Asymmetric preferences for road safety: Evidence from a stated choice experiment among car drivers

Cited by 6 publications

References 28 publications

Estimating the reference frame: A smooth twice-differentiable utility function for non-compensatory loss-averse decision-making

Estimating the reference frame: A smooth twice-differentiable utility function for non-compensatory loss-averse decision-making

Estimating the value of risk reductions for car drivers when pedestrians are involved: a case study in Spain

Risk perception of earthquakes: Modeling conception of willingness to pay and prospect theory

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