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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Johannesson, M., Johansson, PO. & O'Conor, R.M. The value of private safety versus the value of public safety. J Risk Uncertainty 13, 263–275 (1996). https://doi.org/10.1007/BF00056156
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DOI: https://doi.org/10.1007/BF00056156