THE WILLINGNESS TO ACCEPT VALUE OF STATISTICAL LIFE RELATIVE TO THE WILLINGNESS TO PAY VALUE: EVIDENCE AND POLICY IMPLICATIONS

Large disparities between willingness to accept and willingness to pay based values of statistical life are commonly encountered in empirical studies. Theoretically, economists consider that if a public good is easily substitutable, then there should be no marked disparity between willingness to accept and pay values for the good, though the disparity increases with lack of substitutability. Psychologists, on the other hand, argue that people generally treat gains and losses asymmetrically and tend to require a substantially larger increase in wealth to compensate for a loss than the amount they would be willing to pay for an equivalent gain. Although most transport projects may aim to improve safety, situations arise when a relaxation of an existing regulation saves resources but increases the risk of death and injuries. A survey was recently carried out in New Zealand to determine people's willingness to pay to reduce road risks and their willingness to accept compensation for an increase in risk. This paper discusses the relationship observed between the two sets of responses. (a) For the covering entry of this conference, please see ITRD E200461.

Language

  • English

Media Info

  • Features: References;
  • Pagination: p. 1-16

Subject/Index Terms

Filing Info

  • Accession Number: 00796343
  • Record Type: Publication
  • Source Agency: ARRB
  • ISBN: 0-7307-2490-5
  • Files: ITRD, ATRI
  • Created Date: Aug 2 2000 12:00AM