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oai:riuma.uma.es:10630/370702026-02-03T10:58:39Zcom_10630_2254col_10630_37953

Valuation of safety under reference-dependent evaluation of income Robles-Zurita, José Antonio Salarios We analyze data of a Spanish nationally-representative survey where subjects reported their willingness to pay (WTP) for road safety improvements, specifically they hypothetically paid for a reduction of the risk of a road fatality and several injuries. Respondents also reported their current income (CI) and permanent income (PI). The latter refers to their normal income once they considered various stages of low/high earnings throughout their entire lives. Consequently, we define relative income as the comparison of CI with respect to PI. Three income frames are generated as explanatory variables: gain (with CI > PI); neutral (with CI = PI); and loss scenario (with CI < PI). Surprisingly, we find that conditional on current income, and on a set of characteristics, those respondents in gain frame reported higher WTP than those in neutral and loss scenario. Further analysis shows that the income frames effect is higher and more significant for the older half-sample (>45), being about three or four times higher than for the younger subset. Possible interpretations of the role of PI as a reference point are considered given the results. A reference-dependent utility function of income, where PI is the reference point, is proposed to describe the monetary valuation of safety within the theoretical framework previously developed in the safety economics literature. 2025-01-27T11:35:21Z 2025-01-27T11:35:21Z 2015-03-24 journal article Robles-Zurita, J. A. (2015). Valuation of safety under reference-dependent evaluation of income. Accident Analysis & Prevention, 79, 70-79. https://hdl.handle.net/10630/37070 10.1016/j.aap.2015.03.022 eng open access Elsevier