The value of mortality risk reductions in Delhi, India

Abstract

Road accidents kill nearly 1.2 million people each year worldwide, two-thirds of whom live in developing countries. Traffic crashes may indeed become the third leading cause of death in developing countries by the year 2020 (Murray and Lopez, 1996). For governments in developing countries to make informed decisions about investments in traffic safety, it is imperative that the benefits of road traffic improvements be monetized and compared with costs. This, however, requires estimates of the value of reductions in risk of death.The goal of the dissertation is to provide estimates of the value of mortality risk reductions in a traffic safety context in Delhi, India. To estimate the value of road safety improvements in Delhi requires understanding the nature of developing country traffic risks. Methods of valuing traffic fatalities used in high-income countries based on seatbelt use or purchase of safer cars are not applicable here.In my survey I asked 1200 commuters what they would pay to reduce their own risk of dying as a (a) pedestrian, (b) driver of a two-wheeler, and (c) commuter, regardless of travel mode. These scenarios mirror the bulk of fatal accidents in Delhi. I find that mean WTP for mortality risk reduction increases with the size of risk reduction, as predicted by economic theory.WTP for a given risk change increases with income and education. The estimation results broadly confirm the Bayesian updating assumption, in that WTP increases with baseline exposure to risk, measured by commute time, whether the respondent travels as part of his job and whether he drives a two-wheeler. Mean WTP is three times larger for a respondent who drives a two-wheeler and travels on the job than for one who does not.The results of my survey indicate that the VSL is individuated, i.e., it varies across groups of potential beneficiaries of traffic safety programs (two-wheeler drivers, persons with bachelors degree, etc.). For the most highly exposed individuals-the VSL is about $150,000 (PPP, 2005

Measuring the Value of Mortality Risk Reductions in Turkey

“…As for age and status-quo preference, there is no significant relationship observed in Afsin-Elbistan and Ankara; but in Kutahya-Tavsanli, we confirmed a weak evidence of a U-shaped relationship, as an individual's age increases the preference for status-quo decreases, but after age 41, it becomes less as she/he gets older. This finding coincides with the one in Bhattacharya et al [10]. In Afsin-Elbistan and Kutahya-Tavsanli, the higher the respondents’ household income is, the less likely the status-quo option is preferred.…”

“…Although our estimated VSL is higher than the VSL estimated in developing countries such as in China ($4000–$17,000 in 1999 USD [4], $34,458 in 1998 USD [11]) and India ($150,000, PPP adjusted 2005 USD, [10]), it is significantly lower than the estimates for developed countries such as $7.4 million (in 2006 USD), the recommended value by the U.S. Environmental Protection Agency for USA [6] and $ 2.9 million in 2002 USD for Japan estimated by Tsuge et al [17]. Our estimate is slightly more than one-fourth of the value adopted by the European Environment Agency (EEA), that is 1.4 million Euro in 2000 Euros (approximately $1.34 million in 2000 USD or $1.72 million in 2012 USD) [7].…”

“…An inverse-U relationship (VSL increases until its peak, then decreases as an individual gets older) was confirmed in Vassanadumrongdee and Matsuoka [5], while a negative relationship was found in Hammitt and Zhou [4] (a quadratic relationship was not confirmed) and Gibson et al [12], and a positive relationship was found in Wang and Mullahy [11]. In addition, the relationship between the status-quo preference and age was found to be U-shaped in Bhattacharya et al [10]. …”

“…Other VSL studies on developing countries include Hoffmann et al [9], Bhattacharya et al [10], Wang and Mullahy [11] and Gibson et al [12]. Hoffmann et al [9] conducted a computerized CVM survey in Ulaanbaatar, Mongolia in 2010 and derived the WTP for mortality risk reduction for contemporaneous and latent diseases.…”

“…The obtained VSL was $221,000 (in 2009 USD) or $493,000 in PPP adjusted value. Bhattacharya et al [10] conducted CVM to elicit the WTP for reducing the private risk of dying in the context of traffic safety in Delhi, India in 2005. The estimated VSL was $150,000 in PPP adjusted value.…”