Influence of survey engagement and multiple-choice heuristics in the estimation of the value of a statistical life.

Estimating the value of non-market goods, such as reductions in mortality risks due to traffic accidents or air pollution, is typically done using stated choice (SC) data. However, issues with potential estimation biases due to the hypothetical nature of SC experiments arise, as protest choices are common and survey engagement is not constant across respondents. Further, if respondents choose to use different choice mechanisms and this is not considered, the results may also be biased. We designed an SC experiment to estimate the willingness to pay (WTP) for mortality risk reductions, that allowed us to simultaneously estimate the WTP to reduce the risk of traffic accident deaths and cardiorespiratory deaths due to air pollution. We formulated and estimated a multiple heuristic latent class model that also considered two latent constructs: Institutional Belief, to consider protest responses, and survey Engagement as a class membership covariate. We found, first, that individuals with lower institutional belief gave a higher probability of choice to the status-quo alternative, shying away from programs involving governmental action. Second, that not identifying respondents who do not appropriately engage in the experiment, biased the WTP estimators. In our case WTP decreased up to 26% when two different choice heuristics were allowed for in the model.

Stated preference in the valuation of interurban road safety.

In Chile, as in most less-developed nations, if life savings are valued at all the human capital approach is used in a rather non-consistent fashion. As part of a 5-year research project on the value of transport externalities, a stated preference (SP) experiment was carried out in order to assess the value of a statistical life for Chilean interurban motorways. Interviewees had to choose among different routes for a hypothetical trip, based on the following attributes: travel time, toll charge and level of risk. The results of our experiment show that people were sensitive to the risk variable, thus "stating" a preference for safer routes. Several models were estimated with linear and non-linear utility specifications, and also incorporating the effects of socio-economic variables in a novel and interesting fashion. We were able to estimate subjective values of time consistent with previous values obtained in the country and reasonably looking values (in comparison to Chilean prices and foreign experience) of a statistical life. The paper discusses the experimental design, data collection and analysis, with emphasis on the role of lexicographic individuals that are a feature of SP studies that has not been carefully explored in the literature. We also present our modelling results and compare our derived values (of time and of a statistical life) with values found previously and/or elsewhere.