Value of a Statistical Life in Road Safety : A Benefit-Transfer Function with Risk-Analysis Guidance Based on Developing Country Data

We model a value of statistical life (VSL) transfer function for application to road-safety engineering in developing countries through an income-disaggregated meta-analysis of scope-sensitive stated preference VSL data. The income-disaggregated meta-analysis treats developing country and high-incom...

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Main Authors:	Milligan, Craig, Kopp, Andreas, Dahdah, Said, Montufar, Jeannette
Format:	Journal Article
Language:	en_US
Published:	Elsevier 2014
Subjects:	Value of statistical life Road safety Transport economics Developing countries Risk analysis Benefit transfer
Online Access:	http://hdl.handle.net/10986/20711

id	okr-10986-20711
recordtype	oai_dc
spelling	okr-10986-207112021-04-23T14:03:59Z Value of a Statistical Life in Road Safety : A Benefit-Transfer Function with Risk-Analysis Guidance Based on Developing Country Data Milligan, Craig Kopp, Andreas Dahdah, Said Montufar, Jeannette Value of statistical life Road safety Transport economics Developing countries Risk analysis Benefit transfer We model a value of statistical life (VSL) transfer function for application to road-safety engineering in developing countries through an income-disaggregated meta-analysis of scope-sensitive stated preference VSL data. The income-disaggregated meta-analysis treats developing country and high-income country data separately. Previous transfer functions are based on aggregated datasets that are composed largely of data from high-income countries. Recent evidence, particularly with respect to the income elasticity of VSL, suggests that the aggregate approach is deficient because it does not account for a possible change in income elasticity across income levels. Our dataset (a minor update of the OECD database published in 2012) includes 123 scope-sensitive VSL estimates from developing countries and 185 scope-sensitive estimates from high-income countries. The transfer function for developing countries gives VSL = 1.3732E−4 × (GDP per capita)∧2.478, with VSL and GDP per capita expressed in 2005 international dollars (an international dollar being a notional currency with the same purchasing power as the U.S. dollar). The function can be applied for low- and middle-income countries with GDPs per capita above $1268 (with a data gap for very low-income countries), whereas it is not useful above a GDP per capita of about $20,000. The corresponding function built using high-income country data is VSL = 8.2474E+3 × (GDP per capita)∧.6932; it is valid for high-income countries but over-estimates VSL for low- and middle-income countries. The research finds two principal significant differences between the transfer functions modeled using developing-country and high-income-country data, supporting the disaggregated approach. The first of these differences relates to between-country VSL income elasticity, which is 2.478 for the developing country function and .693 for the high-income function; the difference is significant at p < 0.001. This difference was recently postulated but not analyzed by other researchers. The second difference is that the traffic-risk context affects VSL negatively in developing countries and positively in high-income countries. The research quantifies uncertainty in the transfer function using parameters of the non-absolute distribution of relative transfer errors. The low- and middle-income function is unbiased, with a median relative transfer error of −.05 (95% CI: −.15 to .03), a 25th percentile error of −.22 (95% CI: −.29 to −.19), and a 75th percentile error of .20 (95% CI: .14 to .30). The quantified uncertainty characteristics support evidence-based approaches to sensitivity analysis and probabilistic risk analysis of economic performance measures for road-safety investments. 2014-12-15T18:31:51Z 2014-12-15T18:31:51Z 2014-10 Journal Article Accident Analysis and Prevention http://hdl.handle.net/10986/20711 en_US CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Elsevier Publications & Research :: Journal Article
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	en_US
topic	Value of statistical life Road safety Transport economics Developing countries Risk analysis Benefit transfer
spellingShingle	Value of statistical life Road safety Transport economics Developing countries Risk analysis Benefit transfer Milligan, Craig Kopp, Andreas Dahdah, Said Montufar, Jeannette Value of a Statistical Life in Road Safety : A Benefit-Transfer Function with Risk-Analysis Guidance Based on Developing Country Data
description	We model a value of statistical life (VSL) transfer function for application to road-safety engineering in developing countries through an income-disaggregated meta-analysis of scope-sensitive stated preference VSL data. The income-disaggregated meta-analysis treats developing country and high-income country data separately. Previous transfer functions are based on aggregated datasets that are composed largely of data from high-income countries. Recent evidence, particularly with respect to the income elasticity of VSL, suggests that the aggregate approach is deficient because it does not account for a possible change in income elasticity across income levels. Our dataset (a minor update of the OECD database published in 2012) includes 123 scope-sensitive VSL estimates from developing countries and 185 scope-sensitive estimates from high-income countries. The transfer function for developing countries gives VSL = 1.3732E−4 × (GDP per capita)∧2.478, with VSL and GDP per capita expressed in 2005 international dollars (an international dollar being a notional currency with the same purchasing power as the U.S. dollar). The function can be applied for low- and middle-income countries with GDPs per capita above $1268 (with a data gap for very low-income countries), whereas it is not useful above a GDP per capita of about $20,000. The corresponding function built using high-income country data is VSL = 8.2474E+3 × (GDP per capita)∧.6932; it is valid for high-income countries but over-estimates VSL for low- and middle-income countries. The research finds two principal significant differences between the transfer functions modeled using developing-country and high-income-country data, supporting the disaggregated approach. The first of these differences relates to between-country VSL income elasticity, which is 2.478 for the developing country function and .693 for the high-income function; the difference is significant at p < 0.001. This difference was recently postulated but not analyzed by other researchers. The second difference is that the traffic-risk context affects VSL negatively in developing countries and positively in high-income countries. The research quantifies uncertainty in the transfer function using parameters of the non-absolute distribution of relative transfer errors. The low- and middle-income function is unbiased, with a median relative transfer error of −.05 (95% CI: −.15 to .03), a 25th percentile error of −.22 (95% CI: −.29 to −.19), and a 75th percentile error of .20 (95% CI: .14 to .30). The quantified uncertainty characteristics support evidence-based approaches to sensitivity analysis and probabilistic risk analysis of economic performance measures for road-safety investments.
format	Journal Article
author	Milligan, Craig Kopp, Andreas Dahdah, Said Montufar, Jeannette
author_facet	Milligan, Craig Kopp, Andreas Dahdah, Said Montufar, Jeannette
author_sort	Milligan, Craig
title	Value of a Statistical Life in Road Safety : A Benefit-Transfer Function with Risk-Analysis Guidance Based on Developing Country Data
title_short	Value of a Statistical Life in Road Safety : A Benefit-Transfer Function with Risk-Analysis Guidance Based on Developing Country Data
title_full	Value of a Statistical Life in Road Safety : A Benefit-Transfer Function with Risk-Analysis Guidance Based on Developing Country Data
title_fullStr	Value of a Statistical Life in Road Safety : A Benefit-Transfer Function with Risk-Analysis Guidance Based on Developing Country Data
title_full_unstemmed	Value of a Statistical Life in Road Safety : A Benefit-Transfer Function with Risk-Analysis Guidance Based on Developing Country Data
title_sort	value of a statistical life in road safety : a benefit-transfer function with risk-analysis guidance based on developing country data
publisher	Elsevier
publishDate	2014
url	http://hdl.handle.net/10986/20711
_version_	1764447019622989824

Value of a Statistical Life in Road Safety : A Benefit-Transfer Function with Risk-Analysis Guidance Based on Developing Country Data

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