The value of private safety versus the value of public safety |
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Authors: | Magnus Johannesson Per-Olov Johansson Richard M. O'Conor |
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Affiliation: | 1. Department of Economics, Stockholm School of Economics, Box 6501, S-113 83, Stockholm, Sweden 2. Department of Economics, Stockholm School of Economics, Box 6501, S-113 83, Stockholm, Sweden 3. Department of Economics, Stockholm School of Economics, Box 6501, S-113 83, Stockholm, Sweden
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Abstract: | In this study, one group of respondents is offered to purchase a safety device to be installed in their cars, 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. However, the WTP for the private safety device ishigher than the WTP for the public safety measure. Drawing on a model developed by Jones-Lee (1991), we show that some types of altruists may, but need not, be willing to pay more for a private risk reduction than for a uniform risk reduction of the same magnitude. Still, our empirical results are surprising, and further empirical research seems warranted. |
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