A stated-preference study of the willingness-to-pay to reduce traffic risk in urban vs. rural roads

Antoniou, Constantinos · 2013 · Crossref

DOI: 10.1007/s12544-013-0103-3

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Summary

This study investigates how the road environment (urban versus rural) influences the willingness-to-pay (WTP) to reduce traffic risk, specifically estimating the Value of Statistical Life (VOSL) and Value of Preventing a Fatality (VPF). The research is motivated by the disparity in accident severity between urban and rural areas in Greece, where rural accidents are significantly more severe despite lower frequency. The authors aim to determine if differences in WTP reflect genuine valuation differences or variations in perceived risk exposure. The methodology employs a stated-preference (SP) survey using a fractional factorial experimental design. One hundred respondents completed face-to-face interviews, providing data for both urban and rural scenarios. Each respondent evaluated nine scenarios per environment, choosing between two alternatives based on differences in travel cost, time, and annual fatalities. The scenarios were anchored to realistic reference levels, with Average Annual Daily Traffic (AADT) set at 30,000 vehicles for urban roads and 15,000 for rural roads. Respondents indicated their preference on a seven-level ordinal scale. The data were analyzed using ordered probit and random effects ordered probit models, selected to handle the ordinal nature of the responses and account for unobserved heterogeneity across individuals. The results indicate that the WTP to prevent a fatality (WTPF) is 3.6 times higher for rural roads than for urban roads. This substantial difference is interpreted as a reflection of higher perceived risk associated with rural trips rather than a fundamental difference in the value placed on life. When the WTPF is weighted by traffic volume to calculate the Value of Statistical Life (VOSL), the disparity narrows, with the rural VOSL being only 1.85 times higher than the urban VOSL. Additionally, the estimated Value of Time (VOT) was similar for both environments and fell within reasonable magnitudes, further suggesting that the WTP differences are not driven by discrepancies in how respondents value their time. The random effects models provided a better fit than standard ordered probit models, confirming the presence of significant heterogeneity in respondent preferences. The study concludes that while raw WTP estimates vary significantly by environment, the underlying valuation of statistical life is more consistent when adjusted for exposure. The estimated VOSL values are somewhat high compared to global averages but align with previous studies conducted in Greece. The findings imply that policy makers should consider the context of risk perception and exposure when evaluating road safety investments. The research demonstrates the utility of advanced econometric models in SP studies and highlights the importance of distinguishing between individual risk perception and aggregate societal value in traffic safety economics.

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• urban rural setting