Automobile Safety and the Value of Statistical Life in the Family: Valuing Reduced Risk for Children, Adults and the Elderly
powered by 
Keywords
Participating Organizations
Report Details
Summary
This paper addresses the theoretical and empirical aspects of obtaining the value of a statistical life (VSL) for children and the elderly by first presenting a theoretical model of how families value risk and then examining family automobile purchases. Automobile safety is shown to be a family public good, where the marginal cost of purchasing and operating a safer automobile is set equal to the usage-weighted sum of the values of statistical life of family members. The authors use data on automobile purchases to estimate how much single car families of different composition (in terms of children, adults and the retired) spend on safety to impute the VSL of each age group. The authors find that children are valued more highly than some existing studies suggest. The VSL of the elderly is consistent with the discounted present value of life years approach. These results come, in great part, from an analysis of the fatal accident data that shows that fragility--the susceptibility to death in an accident of fixed severity--increases with age. Also, the authors show that an important factor for survival in two-vehicle accidents is the relative weight of the vehicles involved. The models of survival in fatal accidents are used to estimate standardized risks of mortality in different types of vehicles. These standardized risks are then used in hedonic models of the purchase price and fuel efficiency of a specified vehicle to determine the capital costs and the operating cost of reducing the risk of mortality.
How to Obtain Report
Download report now
Use link to download or view the report
Date Linked: 05/28/2009