The value of statistical life in the context of road safety: new evidence on the contingent valuation/standard gamble chained approach

Abstract

This study estimates the value of statistical life (VSL) on a road traffic accident using the Contingent Valuation/Standard Gamble chained approach. A large representative sample (n = 2020) is used to calculate a VSL for use in the evaluation of road safety programmes in Spain. The paper also makes some methodological contributions, by providing new evidence about the consistency of the chained method. Our main results are: (1) A range from 1.3 million euro to 1.7 million euro is obtained for the VSL in Spain in the context of road accidents. This range is in line with the values used in the same context in other European countries, although it is lower than those obtained in different contexts and with other methods. (2) The method performs much better in terms of scope sensitivity than the traditional contingent valuation method, which asks subjects about their willingness to pay for very small reductions in the risk of death. (3) We introduce a new ‘indirect’ chaining approach which reduces (but does not remove) the disparity between direct and indirect chaining approaches. More extreme VSL estimates are still obtained with this indirect method than with the direct one. (4) VSL estimates depend on the injury used. More specifically, we obtained a lower VSL when a more severe injury is used. (5) Framing the risk of death in the modified standard gamble question as “10n in 10,000” instead of “n in 1000” influences the value of VSL. We attribute this effect to the Ratio Bias.

A Systematic Review of the Application of Road Safety Valuation Methods in Assessing the Economic Impact of Road Traffic Injuries

“…Hedonic pricing involves considering various marketable factors that affect the pricing of goods and services; for example, the value of a safety device includes both its internal characteristics and external factors [42]. The standard gamble method is different but related to WTP, since it also involves the use of contingent valuation surveys to collect relevant data [43,44]. The standard gamble method estimates the risk an individual is willing to accept to avoid early death [42].…”

Estimating the Value of Statistical Life in a Road Safety Context Based on the Contingent Valuation Method

“…Direct elicitation of the VSL or WTP based on various methodologies, ranging from contingent valuation to discrete choice experiment, is the first and largest category. It is evident from the findings of these researches [13][14][15][16][17][18][19][20][21][22][23] that the values vary significantly.…”