The Impact of Real Options on Willingness to Pay for Mortality Risk Reductions

The Impact of Real Options on Willingness to Pay for Mortality Risk Reductions

Publisher's full text
Niclas A Krüger
Mikael Svensson

Public investments are dynamic in nature, and decision making must account for the uncertainty, irreversibility and potential for future learning. In this paper we adapt the theory for investment under uncertainty for a public referendum setting and perform the first empirical test to show that estimates of the value of a statistical lite (VSL) from stated preference surveys are highly dependent on the inclusion of the option value. Our results indicate an option value of a major economic magnitude. This implies that previously reported VSL estimates, used in societal benefit-cost analysis of health investments, are exaggerated.

LATEST NEWS


2018-06-13

International Conference on Electric Road Systems starts today

Electric Road Systems (ERS) is a relatively new concept with many initiatives on the way. To learn from each other and stimulate new collaborations the Swedish Research and Innovation Platform for Electric Roads arranged the first international conference...


2018-05-18

Same survey of road users’ attitudes in 50 countries

At the Road Safety on Five Continents Conference, RS5C, one entire session presented a large survey of road users' attitudes in 38 countries. Results show large differences between countries in many areas, both regarding behavior and attitudes. A new survey...


2018-05-17

Good results with alcohol interlock program according to Swedish study

An alcohol interlock program makes it possible for drink driving offenders to continue their everyday lives. In a Swedish study most of the participants were satisfied with the program and experienced improved health. They also reported drinking alcohol more...


2018-05-16

Traffic safety in the spotlight

Today the Conference Road Safety on Five Continents (RS5C) opened in Jeju Island, South Korea. More than 220 participators have come from all over the world to present findings and learn about traffic safety. Dr. Young Tae Kim, Secretary-General of the...


2018-04-17

VTI will develop simulators for ambulance staff

VTI has initiated a pilot study for paramedics with the Centre for Teaching & Research in Disaster Medicine and Traumatology and Linköping University. The aim is to give ambulance staff the opportunity to practice critical medical tasks in a moving vehicle in...


2018-04-12

Unique electrified road opens in Sweden

The world’s first electrified road recharging the batteries of cars and trucks while driving opened in Sweden. The Swedish Minister for Infrastructure, Tomas Eneroth, was at the formal inauguration of the electrified road on April 11, 2018. VTI is one of 22...