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The Value of Safety as Revealed in the Swedish Car Market: An Application of the Hedonic Pricing Approach

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Abstract

In this article the hedonic regression technique is used to estimate the value of traffic safety, using information from the Swedish market for automobiles. The results from the study show that the market price of an automobile is negatively correlated with its inherent risk level, i.e. Swedish car consumers pay a safety premium for safer cars. In comparison to previous Swedish stated-preference studies, this study reveals a lower willingness to pay for additional car safety, which might be a result of the interaction between government interventions and individual self-insurance and self-protection.

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Authors and Affiliations

  1. Department of Economics, Lund University, and Lund University Centre for Health Economics (LUCHE), SE-220 07, LUND, Sweden

    Henrik Andersson

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  1. Henrik Andersson
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Correspondence to Henrik Andersson.

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JEL Classification: C51, D61, J28

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Andersson, H. The Value of Safety as Revealed in the Swedish Car Market: An Application of the Hedonic Pricing Approach. J Risk Uncertainty 30, 211–239 (2005). https://doi.org/10.1007/s11166-005-1154-1

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  • DOI: https://doi.org/10.1007/s11166-005-1154-1

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