THE VALUE OF PRIVATE SAFETY VERSUS THE VALUE OF PUBLIC SAFETY

In this study, one group of respondents is offered to purchase a safet y device to be installed in their cars, while another group is offered a public safety program (improved road quality) which results in the same size risk reduction. In terms of the value of a statistical life, our results are very reasonable. However, the WTP for the private saf ety device is higher than the WTP for the public safety measure. Drawi ng on a model developed by Jones-Lee (1991), we show that some types o f altruists may, but need not, be willing to pay more for a private ri sk reduction than for a uniform risk reduction of the same magnitude. Still, our empirical results are surprising, and further empirical res earch seems warranted.