The Value of Private Safety Versus the Value of Public Safety
JOURNAL OF RISK AND UNCERTAINTY, Vol. 13, No. 3, 1996
Posted: 27 Aug 1996
In this study, one group of respondents is offered to purchase 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. 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 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.
JEL Classification: D61, D91, H51, I10, I12
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