We analyze the differences between corner solution and survival models in estimating the marginal cost of track renewals. Both approaches describe the renewal process in intuitively similar ways but have several methodological distinctions. Using Swedish data for the 1999-2016 period, results suggest the median marginal costs per gross ton-km from corner solution and survival models are SEK 0.0066 and SEK 0.0031, respectively. Since several European countries use information about marginal costs as a basis for track user charges, the choice of estimation method is obviously important. Our conclusion is that the corner solution model is more appropriate in this case, as this method considers the impact traffic has both on the probability of renewal and on the size of the renewal cost. The survival approach does not consider the latter as part of the estimations, which is problematic when we have systematic cost variations due to traffic and infrastructure characteristics.
Obtaining insurance is expected to have disincentive effects on driver behavior, and as such on accident probabilities due to the adverse selection and=or moral hazard effects, though empirical studies provide mixed evidence. The risks of an accident incurred by uninsured drivers are, however, indeterminate as well, because of the unavailability of individual level data on uninsured drivers. Therefore, the purpose of this article is to empirically analyze whether insured or uninsured drivers pose greater accident risks. It uses unique individual level data on privately owned insured and uninsured passenger vehicles in Sweden for the period 2006 to 2010. The results show that the accident probability of uninsured drivers is 34 percentage points higher than for insured drivers, with uninsured drivers age 25 to 34 years posing the highest risk of an accident. This implies that uninsured drivers are a high-risk group and a significant threat to traffic safety. Possible solutions and policy implications are discussed at the end of the article.
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