Scale heterogeneity in the valuation of road traffic risk reductions: the case of Newfoundland's moose-vehicle collisions
Roberto Martinez-Espineira and María Pérez-Urdiales, April 2019
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The willingness to pay (WTP) for reductions in the risk of moose-vehicle collision in Newfoundland (the insular portion of Newfoundland and Labrador, Canada) is estimated using the Contingent Valuation Method. Our estimations ...use the information obtained from a double-bounded payment format and let us examine the existence of scale heterogeneity (dependent on response certainty levels), question effects such as anchoring and shift effects, and the effects of accounting for the former on the latter. Our main findings are that the estimated WTP tends to be lower in the models that account for scale heterogeneity but that correction makes little difference in models that fully correct for the question effects involved in the use of the double-bound payment format. Accounting for scale heterogeneity does change, however, the way in which corrections for question effects influence the size of welfare estimates. In particular, it reduces the variability of welfare measures across treatments of these question effects, yielding an estimate of WTP close to the one obtained from using the single-bounded portion of the data.
Valuation of a Moose-Vehicle Accident Mitigation Policy in Newfoundland
Roberto Martinez-Espineira and Nikita Lyssenko, October 2014
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While moose are an iconic Canadian symbol, they are also considered by many in Newfoundland and Labrador as an environmental disamenity, due to the rising number of negative moose-people interactions. There are about 600-800 moose-vehicle collisions each year, which result on average in two fatalities per year. ...There is also an ongoing public debate regarding moose control options in the province. Economic theory suggests that only policies that balance benefits and costs result in a maximization of net social benefits. When it comes to the removal or abatement of an environmental bad (such as wildlife-vehicle accidents), it is more often than not the case that, while it is relatively easy to compute the cost of a policy, its benefits are difficult to monetize, because such policies often deal with goods and services without a market price. Economists have, however, developed non-market valuation techniques that aim at estimating the economic benefits of these types of policies. In this case, we apply the Contingent Valuation Method to estimate the benefits that Newfoundlanders would derive from a moose control program, including the estimation of a key ingredient of the policy decision in this instance, the value of a statistical life. The valuation exercise yields estimates of the benefits that respondents would derive from the mitigation of moose related road accidents in Newfoundland. These values could then be used to inform cost-benefit analyses of risk reduction policies related to collisions with wildlife in this province but also, with appropriate adjustments, of policies related to the sacrifice of resources in any other way in order to protect the public.