Road safety

Cover of Social Costs of Road Crashes in Australia: The Case for Willingness-to-pay Values for Road Safety
Social Costs of Road Crashes in Australia: The Case for Willingness-to-pay Values for Road Safety
  • Publication no: AP-R438-15
  • ISBN: 978-1-921991-96-7
  • Published: 9 February 2015

This report provides a broad indication of the methodology, project components, expertise available and indicative costs required to produce a robust national willingness to pay (WTP) estimate of the social cost of Australian road crashes.

The project involved a review of local experience in the form of the WTP approach applied by the New South Wales (NSW) Roads and Traffic Authority (RTA), now in Transport for NSW. The study also reviewed a number of selected international case studies, focusing on the New Zealand experience. The case studies included information not only on the published results, but also detailed information on the methodologies employed and data collection methods.

The project included interviews with a number of Australasian experts to obtain information on their experience, their advice on the key research components and indicative costs that might be anticipated for a national WTP study for Australia. The study also identified and assessed several interim options for WTP values that may be used until a national WTP study for Australia is completed. One of these is identified as an interim option, namely: updated WTP values from the RTA NSW study.

In scoping a national WTP study for Australia, the following components were identified: survey/experiment design, pilot study, data collection and analysis, model estimation and project management. This study has identified the types of skills required and established that Australia does indeed possess the necessary expertise to successfully complete this kind of study. Interviews with identified WTP experts revealed that a national WTP study would involve indicative costs of around $1 million (in 2012 prices) and take 3–4 years to complete.

  • Summary
  • Contents
  • 1. Introduction
    • 1.1. Background
    • 1.2. Objective of this Study
    • 1.3. Need for a National WTP Study
    • 1.4. Structure of the Report
  • 2. Review of Local and International Experience
    • 2.1. Selected Case Studies
    • 2.2. Analysis of Case Studies
      • 2.2.1. Methodology
      • 2.2.2. Data (Including Choice Experiment/Survey Design, Interview Survey Technique, Data Acquisition)
      • 2.2.3. Empirical Analysis and Results
      • 2.2.4. Study Timeline and Estimated Costs
      • 2.2.5. Reference to Publications Produced and Researchers Involved
      • 2.2.6. Detailed Information on Case Studies
  • 3. Interviews with Australasian Experts
    • 3.1. Issues Included in the Interviews
    • 3.2. Interview Method
    • 3.3. Australian Experience
    • 3.4. New Zealand Experience
    • 3.5. Contact Details of Identified WTP Experts
    • 3.6. Lessons Learned for Australia
  • 4. Scoping a National WTP Study for Australia
    • 4.1. Methodology
    • 4.2. Data Requirements and Collection
      • 4.2.1. Experiment Design
      • 4.2.2. Pilot Study
      • 4.2.3. Sample Size for Main Study
      • 4.2.4. Extent of the Sample
      • 4.2.5. Sample Segmentation
      • 4.2.6. Mode of Data Collection
      • 4.2.7. Survey/Experiment Strategy
    • 4.3. Models for Empirical Estimation
    • 4.4. Importance of Crash Risk and Exposure Data
    • 4.5. Timeframe
    • 4.6. Expertise Required
      • 4.6.1. Technical Experts/Consultants/Academics
      • 4.6.2. Survey/Market Research Firm
      • 4.6.3. Project Management
      • 4.6.4. Client Project Management
      • 4.6.5. Peer Review
    • 4.7. Indicative Costs
      • 4.7.1. Inclusion of Rail and Aviation
    • 4.8. Updating of Estimated WTP Values and Repetition of a National WTP Study
      • 4.8.1. Updating of WTP Values
      • 4.8.2. Frequency of Repetition of WTP Study
    • 4.9. Treatment of Crash Site and Additional Costs
  • 5. Interim Options
    • 5.1. Recommended Option
  • 6. Conclusions and Way Forward
  • References
  • Appendix A Bureau of Infrastructure, Transport and Regional Economics (BITRE) Hybrid Human Capital Method
  • Appendix B Updating of Austroads Unit Values
  • Appendix C New South Wales RTA study
  • C.1 Methodology
  • C.1.1 Value of Statistical Life (VSL) Estimation
  • C.1.2 Aggregating Individual WTP per Trip up to the Total Population
  • C.2 Experiment Design
  • C.3 Survey Approach
  • C.4 Models
  • C.5 Results
  • C.6 Software
  • C.7 Lessons for Australia
  • Appendix D New Zealand Experience
  • D.1 Part 1: WTP Project Development
  • D.1.1 Project Expertise
  • D.1.2 Cost and Timeframe
  • D.1.3 Pilot
  • D.1.4 Experiment Design
  • D.1.5 Questionnaire
  • D.1.6 Survey Respondents and Sample Size
  • D.1.7 Sample Selection Procedure
  • D.1.8 Sample Estimation Method
  • D.1.9 Survey Results
  • D.1.10 Comparison with Other Countries
  • D.2 Part 2: WTP and WTA Project Enhancement
  • D.2.1 Project Expertise
  • D.2.2 Cost and Timeframe
  • D.2.3 Experiment Design
  • D.2.4 Questionnaire
  • D.2.5 Survey Respondents and Sample Size
  • D.2.6 Sample Segmentation
  • D.2.7 Sample Estimation Method
  • D.2.8 Survey Results
  • D.3 Part 3: Methodology of Annual Updates
  • D.3.1 Cost Estimation
  • D.4 Crash/Unit Values
  • D.5 Lessons for Australia
  • Appendix E Swedish Experience
  • E.1 Methodology
  • E.1.1 Approach
  • E.1.2 Application to Safety
  • E.2 Survey Design
  • E.2.1 Survey Details and Data Supplements
  • E.2.2 Variables Used in the Hedonic Pricing Function
  • E.2.3 Accident Characteristics
  • E.3 Empirical Model
  • E.3.1 Atemporal Model
  • E.3.2 Life-cycle Model
  • E.4 Results and Comparison with Other Swedish Studies
  • E.5 Lessons for Australia
  • Appendix F Norwegian Experience
  • F.1 Background
  • F.2 2009–10 WTP study16F
  • F.3 Method
  • F.4 Variables
  • F.5 Data Sources
  • F.6 Results
  • F.7 Lessons for Australia
  • Appendix G United Kingdom Experience
  • G.1 Background
  • G.2 Method
  • G.3 Variables
  • G.4 Development of WTP in the UK
  • G.4.1 1982 Study
  • G.4.2 1988 Value for Preventing Fatal Injury
  • G.4.3 1991 Non-fatal Injury Study
  • G.4.4 1995 to 1996 Feasibility Study
  • G.4.5 1997 CV-SG Chained Approach
  • G.4.6 2010 Updating the VPF and VPIs
  • G.5 Data Sources
  • G.6 Results
  • G.7 Lessons for Australia
  • Appendix H Singapore Experience
  • H.1 Methods
  • H.2 Modes and Trip Purposes Included
  • H.3 CV Exercise
  • H.4 Stated Preference Exercise
  • H.5 Approach and Model Specification
  • H.6 Results
  • H.7 Lessons for Australia
  • Appendix I Assessment of Interim Options
  • I.1 Option 1: RTA NSW Values (Updated)
  • I.2 Option 2: Simple Average of RTA and BITRE Values
  • I.3 Option 3: Weighted Average of RTA NSW and New Zealand
  • I.4 Option 4: Weighted Average of Developed Country Values
  • I.5 Option 5: RTA WTP per Trip Adjusted for State or National Travel Exposure to Risk
  • Appendix J Contact Details of Identified Local and International WTP Experts