%0 Journal Article
%T Explaining Perceived Inconsistencies in ¡°Stated Preference¡± Valuations of Human Life
%A Philip Thomas
%A Geoff Vaughan
%J American Journal of Industrial and Business Management
%P 442-473
%@ 2164-5175
%D 2014
%I Scientific Research Publishing
%R 10.4236/ajibm.2014.49052
%X The Relative
Utility Pricing model is used to explain the fact that when faced with two ¡°safety
packs¡±, the second giving three times the safety benefit of the first,
discriminating respondents will place a value on the second pack that is, on
average, twice the amount they say they will be prepared to pay for the first. When
the safety packs reduce fatal accident frequencies, the ¡°value of a prevented
fatality¡± (VPF) figures deduced from the valuations of the two safety packs
must then be significantly different. Such response patterns on the part of
respondents were found in a high-profile study carried out on behalf of a
number of UK Government Departments. However, the authors of that study
considered the responses ¡°aberrant¡±, and dismissed their survey in favour of
their later one, which they based on a novel elicitation technique and which
led to a VPF that was lower by a factor of between 5 and 10. That method has
been shown elsewhere to be invalid, which returns the focus to the original
study rejected by its authors. This paper shows that the VPFs produced by the
first study are fully explicable and cannot be dismissed if the stated preference
approach is to be accepted. However, in view of the difficulties experienced
with stated preference techniques in the valuation of life, it is clear that an
urgent reappraisal is needed of revealed preference techniques if people¡¯s
safety is to be safeguarded adequately.
%K Value of a Prevented Fatality
%K VPF
%K Relative Utility Pricing
%K RUP
%K Stated Preference
%K Opinion Survey
%U http://www.scirp.org/journal/PaperInformation.aspx?PaperID=49597