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Integrating Travel Delays, Road Safety, Care, Vehicle Insurance and Cost-Benefit Analysis of Road Capacity Expansion in a Unified Framework

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Abstract

Assuming that both road safety and travel time are a function of traffic density and care from a driver’s standpoint, a theoretical framework is developed. First, an expected-utility framework is developed to study the optimal choice of care by a rational driver. Second, the subjective value of traffic density is derived as a measure of drivers’ willingness to pay for simultaneous road safety improvements and travel time savings. Third, the above results are revisited when car insurance is available. Fourth, a simple cost-benefit analysis rule of road capacity expansion is derived when moral hazard is present.

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Authors and Affiliations

  1. Department of Transport Engineering and Logistics, Pontificia Universidad Católica de Chile, Casilla 306, Cod. 105, Santiago, 22, Chile

    Luis Ignacio Rizzi

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  1. Luis Ignacio Rizzi
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Correspondence to Luis Ignacio Rizzi.

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Rizzi, L.I. Integrating Travel Delays, Road Safety, Care, Vehicle Insurance and Cost-Benefit Analysis of Road Capacity Expansion in a Unified Framework. Netw Spat Econ 8, 125–140 (2008). https://doi.org/10.1007/s11067-007-9047-2

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  • DOI: https://doi.org/10.1007/s11067-007-9047-2

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