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Essay On Traffic Safety

Non-market survey techniques to examine individual preferences for a reduced risk of injury or death in the traffic environment therefore have to be used. The two methods used are stated preferences (SP) and revealed preferences (RP). In a SP study individuals are exposed to not real market situations where they are asked to state their opinions for a certain good. The other approach to estimate individual preferences, the RP approach is to use actual market behavior. In an RP study the individuals" preferences for a non-marketed good are estimated by observing the behavior of the individuals on an existing market where there is a relationship between the non-marketed good of interest and the market good. One SP method is the contingent valuation method (CV), in which individuals are asked to state their willingness-to-pay (WTP) for a good of interest. The first to propose the CV method was Ciriacy-Wantrup in 1947, but the one to develop the method was Davis in 1963 when he used it to value recreation. Most of the CV studies have thereafter been in the field of environmental economics. It was first in the 1980s that researchers started to use the technique in the traffic environment. By now several CV studies concerning the value of traffic safety have been conducted e.g. Jones-Lee et al. and Persson et al. The research on CV today focus on how to deal with/eliminate the possible biases (i.e. the discrepancy between values obtained by the study and real market values) of the method. The biases in a CV study can be divided into two major groups: embedding bias and hypothetical bias (Desaigues and Rabl, 1995). Embedding bias refer to the tendency of respondents in CV studies to give highly similar answers where theory suggest that the responses should be very different. The embedding effect was first noted by Kahneman and Knetsch (1992). An example of embedding in the traffic environment would be if the WTP of a 10% risk reduction roughly equal that of a 50% risk reduction.


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