Willingness to pay for car safety : sensitivity to time framing Andersson, Henrik ; Hammitt, James ; Lindberg, Gunnar ; Sundström, Kristian
Series: working papers in transport economicsPublication details: Stockholm Swedish National Road & Transport Research Institute [VTI], 2008; Working Papers 2008:8, ; S-WoPEc, Scandinavian Working Papers in Economics, Description: 27 sSubject(s): Online resources: Abstract: Stated preference (SP) surveys attempt to obtain monetary values for non-market goods that reflect individuals "true" preferences. Numerous empirical studies suggest that monetary values from SP studies are sensitive to survey design and so may not reflect respondents' true preferences. This study examines the effect of time framing on respondents' willingness to pay (WTP) for car safety. We explore how WTP per unit risk reduction depends on the time period over which respondents pay and face reduced risk. Using data from a Swedish contingent valuation survey, we find that WTP is sensitive to time framing; estimates based on an annual scenario are about 30 to 70 percent higher than estimates from a monthly scenario.Stated preference (SP) surveys attempt to obtain monetary values for non-market goods that reflect individuals "true" preferences. Numerous empirical studies suggest that monetary values from SP studies are sensitive to survey design and so may not reflect respondents' true preferences. This study examines the effect of time framing on respondents' willingness to pay (WTP) for car safety. We explore how WTP per unit risk reduction depends on the time period over which respondents pay and face reduced risk. Using data from a Swedish contingent valuation survey, we find that WTP is sensitive to time framing; estimates based on an annual scenario are about 30 to 70 percent higher than estimates from a monthly scenario.