Automobile seatbelt usage and the value of statistical life.

AuthorHakes, Jahn K.
PositionAuthor abstract
  1. Introduction

    The two principal ways by which people can reduce their health and safety risks are by choosing safer activities or by taking additional precautions while engaging in a risky activity. Seatbelt usage has been the most important natural experiment of individual self protection. A substantial economic literature has analyzed the efficacy of seatbelts in promoting safety, (1) the desirability of using seatbelts from a benefit-cost standpoint, (2) and the implications of seatbelt use for making inferences about an individual's willingness to bear health risks, or about the implicit value of a statistical life. (3) Most studies suggest that, on balance, wearing seatbelts is a safety precaution for which the benefits to the average individual exceed the costs. Whether there are overall safety benefits to society remains controversial, however, due to the effect of self-protection on the level of care the driver uses. (4)

    It has long been a policy concern that some individuals fail to perceive the benefits of seatbelt usage. Informational campaigns can affect decision-making by helping people to more accurately perceive the risk reduction achievable by using seatbelts. However, the informational campaign designed to foster seatbelt usage is perhaps the best documented failure of government information efforts to alter behavior. (5) The main lesson from this informational failure is that reminder warnings that do not provide new knowledge do not alter behavior. The results presented here also suggest that there may be no major information gap that should be filled.

    The focus of this paper is on the implied value of statistical life (VSL) based on seatbelt usage and the consistency of those estimates with the VSL levels that the same sample reveals in a stated preference survey. In each instance, one computes the VSL based on the tradeoff rate between the change in costs and the change in the risk, or

    VSL = [DELTA]Cost/[DELTA]Risk. (1)

    For the stated preference survey, the estimates of VSL are quite direct. Respondents consider a policy option with a well-defined risk reduction and indicate the maximum value of [DELTA]Cost that they are willing to incur to achieve that risk reduction. (6)

    Our estimation of the VSL implied by seatbelt usage derives an imputed value using an approach introduced by Blomquist (1979). Government estimates of seatbelt efficacy provide the pertinent value for [DELTA]Risk. The value of [DELTA]Cost consists of three components: the time cost of buckling up, the disutility cost of having one's range of motion restricted by the belt, and the reduction in expected legal penalties from not buckling up in the presence of mandatory seatbelt laws. (7) Rearranging Equation 1, a person will choose to wear seatbelts if

    [DELTA]Cost

    For continuous fatality risk choices, the VSL should be the same across various risk domains, as shown in Viscusi (1998).

    Overall, more than 75% of drivers use seatbelts. That all people do not use seatbelts all the time, however, is not necessarily inconsistent with rational behavior. To determine the rationality of the decision to use seatbelts on a particular trip would require more information on the costs of precautions and the likely benefits, which will vary with contextual details such as the type of vehicle driven, where the vehicle is driven, and how the vehicle is driven.

    Although the available data do not enable us to resolve the question of whether seatbelt usage decisions are rational, it is feasible to explore the consistency of these risk-taking decisions across different domains. Consistent risk takers should display the same threshold risk-cost tradeoff across different choices if these safety decisions are continuous. Because seatbelt usage decisions are discrete, there may be some observed VSL differences even if people are being consistent risk takers.

    The first test of the consistency of seatbelt usage with risk-taking behavior is a comparison of the stated preference VSL amounts with the estimated VSL range implied by seatbelt usage. Meta-analyses such as Viscusi and Aldy (2003) and Blomquist (2004) have made comparisons across samples and across different studies, many of which involve different risk situations. The unique feature of this study is that in addition to making comparisons to VSL estimates in the literature, we also make within-sample tests that hold constant both the sample composition and the risk context. Although some previous studies have generated both stated preference VSL amounts and market-based estimates, these studies have not used this evidence as a test of the consistency of actual risk-taking decisions and stated preferences across individuals. (8)

    The second consistency test that we report is the responsiveness of seatbelt usage rates to the individual's stated VSL. Are people who have higher stated VSL levels more likely to wear seatbelts, as theory predicts? This article reports the first tests in the literature linking stated preference values to self-protective behavior.

    We also examine other economic determinants of seatbelt usage to test whether behavior is consistent with cost-risk balancing. For example, people who have revealed themselves to be risk takers by smoking cigarettes should be less likely to use seatbelts. (9) In contrast, members of demographic groups who more correctly perceive large health and safety risks, particularly women and those with college or advanced degrees, should be more likely to use seatbelts. (10)

    This paper provides comparisons within-sample and with respect to other revealed preference estimates that focus primarily on traffic safety situations. As Dionne and Lanoie (2002) have suggested, the VSL for transportation risks could differ from the VSL for job fatality risks because the nature of the deaths may differ. These differences may not be substantial, however, as Blomquist concluded that the VSLs based on revealed preference consumption behavior and protective behavior "fall in the range of estimates based on averting behavior in the labor market" (2004, p. 104). Both revealed preference studies and stated preference studies have addressed traffic safety risks, but not with respect to the within-sample consistency of the estimates. Comparisons across studies in different risk contexts suggest that the VSL levels in the literature implied by seatbelt usage decisions are comparable to or perhaps a bit lower than the estimated VSLs in other contexts, such as labor market risks. (11)

    There have also been several stated preference estimates of the VSL for traffic safety risks, such as those by Jones-Lee (1989) for the UK and Viscusi, Magat, and Huber (1991) for the United States. Whereas Miller (2000) concluded that the VSLs derived from stated preference approaches were higher than those from averting behavior, the survey in Viscusi (1993) found them to be similar in magnitude to the estimates implied by labor market studies. Our study employs this stated preference approach to construct a measure of individual risk preferences that can be incorporated in an empirical model of seatbelt usage decisions.

    Subsequent sections explore the interrelationships among different VSL amounts and seatbelt usage. Section 2 presents an overview of the characteristics of our sample of 465 adults and presents their stated preference VSL amounts. The effect of these VSL levels and other variables on the probability of seatbelt usage is examined in section 3. In section 4, we derive measures of VSL implied by the self-protective seatbelt usage behavior, and section 5 concludes.

  2. Sample Characteristics: Stated Preference VSLs and Seatbelt Usage

    As Equation 2 indicates, seatbelt usage increases as a person's VSL increases and is greater if the person perceives a large reduction in risk. The focus of this section is on the probability that an individual uses seatbelts and whether that probability responds to a stated preference measure of VSL and other variables in the expected manner.

    To explore these issues, we use an original survey of 465 respondents undertaken in 1998 in Phoenix, Arizona. The main advantage of this data set is that it has unique information on VSL amounts and risk beliefs that can be linked to seatbelt usage. Because only 90 people in the sample do not use seatbelts, the sample size is relatively small, but nevertheless we find significant effects for the key variables of concern. A marketing firm in Phoenix recruited subjects through random-digit dialing and paid each $40 to come to a central location to fill out a half-hour-long survey questionnaire pertaining to a series of risk issues. (12) Although one might expect that people with a low opportunity cost of time would be drawn to participate in the survey, the average education level of respondents is above the average for Phoenix and for Arizona generally. (13) The sample reflects a broad cross section of society, but not a random sample of the entire U.S. population, so it is important to control the estimates for differences in demographic characteristics. Because the whole sample is drawn from a single city, state differences in sanctions for failure to use seatbelts do not enter the analysis.

    Table 1 provides the demographic characteristics and VSL amounts for three groups: the full sample, people who always use seatbelts, and those who never or only sometimes wear seatbelts. (14) On average, the sample is 44.3 years old, has 14.6 years of schooling, is 10% nonwhite, and is 69% female. Subsequent regression analysis controls for these personal characteristics so that we can use these estimates to make projections to a more representative population mix.

    The VSL variable is calculated from respondents' expressed willingness to pay for a reduction in their risk one-year of death due to an automobile accident. (15) The wording of the question is as follows:

    Suppose you could reduce your annual...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT