Jacek J. Wojciechowicz, PKP S.A.

based on the presentation by Radek Czapski, Kate McMahon

and Said Dahdah, The World Bank

• Willingness to pay surveys

• Human capital approach• “Rule of Thumb” using ratio of Value of

Statistical Life (VOSL) to GDP per capita

• GDP per capita plus pain, grief and suffering

• Internationally preferred method.• Requires complex surveys to obtain

estimates.• Assumes ability of respondents to give

accurate and consistent answers to hypothetical questions.

• Questionable reliability in developing countries.

• Medical costs, net lost output and accident costs are added to the WTP value.

• Measures loss to society in terms of lost output.

• Less comprehensive than WTP as it does not value non-economic element of the loss of human life.

• Less demanding valuation method but requires good data on output.

• Medical costs and accident related costs are added.

• Economic theory proposes that the worth of a good is what people are willing to pay for it.

• No difference in principle between market goods such as cars and non-market goods such as safety.

• But establishing WTP for non-market goods is more challenging.

• Should the VOSL vary between high income countries and low income countries?

• Surely a life is a life and of equal value?

• But WTP is strongly influenced by income.

• It is also likely to reflect cultural attitudes to safety and the priority given to it.

• It is legitimate to use VOSL that takes account of income, whether estimated by WTP or human capital.

• Deriving VOSL from range of ratios of VOSL/GDP per capita from developed country estimates would provide a rule of thumb approach that would avoid costly and impractical surveys.

• Review estimates of VOSL from a range of developed and developing countries.

• Calculate ratios of VOSL to GDP per capita.

• Select upper and lower limits and preferred ratio to apply to developing countries.

• Estimate VOSL by multiplying ratio by GDP per capita for each pilot country.

• Does not require medical costs to be added, but accident costs needed for value of fatal accident.

Country VOSL GDP per capita VOSL/GDP per capita

USA $ 3m $ 34,851 86

Canada C$ 1.760m C$ 34,173 52

Netherlands € 1.806m € 26,400 68

New Zealand NZ$ 3.065m NZ$ 30,480 99

Sweden € 1.327m € 19,663 55

UK £ 1.384m £ 18,230 76

Country VOSL GDP per capita VOSL/GDP per capita

Malaysia RM 1.200m RM 9,302 130

Cambodia $ 18,864 $ 317 60

Indonesia Rp 255.733m Rp 7.142m 36

Laos $ 4,671 $ 336 21

Myanmar MK 4.806m MK 68,099 71

Philippines $ 41,330 $ 982 42

Singapore S$ 1.368m S$ 33,238 36

Thailand B 2.741m B 51,008 54

Vietnam D 162.620m D 3.844m 42

Country VOSL GDP per capita VOSL/GDP per capita

Bangladesh

(TRL)

Tk 889,528 Tk 16,169 55

Kenya $ 25,000 $ 430 58

India (WTP) Rs 1.311m Rs 23,578 56

� Less straightforward than VOSL due to differences in definition and in injury distribution.

� More severe injuries likely in developing countries: more VRUs, lower reporting rates of less severe injury, poorer long-term outcomes with higher disability levels due to lower levels of trauma care.

� But higher death rate from injury removing most severe cases.

� Human Capital Approach or WTP

(require lots of data collection)

� As Percentage of Value of Statistical Life (VOSL)

� Easy to use but biased by variation in injury mix

Country VSL VSI VSL/VSI

Australia 1.832 m 397,000 22%

France 1.156 m 124,987 11%

Germany 1.161 m 86,269 8%

New Zealand 3.050 m 535,000 18%

UK 1.384 m 155,563 11%

USA 3.000 m 510,000 17%

� VOSL- PLN 2.8 mln

� VSI- PLN 700 000

� 2013- 34 fatalities=PLN 95 200 000*

� 2013- 35 serious injuries= PLN 24 500000*

� Total estimated costs of level crossing accidentsin Poland in 2013: PLN 119 500000

� or approx. Euro 29 000 000*

� Estimated costs between 2005-2013: PLN 1bln 426 thousand or Euro 375 mln*

*Source: Own calculations

� HEATCO Blue Bookhttp://blog.optimaconsulting.com.pl/wp-content/uploads/2011/01/20110102_Model_PRZYKLADOWY-PROJEKT_NK_150_50.pdf

� Research Institute of Roads and Bridges

� In 2012

� Cost of fatality- PLN 2.5 mln

� Cost of serious injury- PLN 1,1 mln

� Cost of light injury- PLN 15 000

� Material costs of road accident- PLN 80 000

� The methods proposed above were used to calculate the costs of road accidents in selected countries.

� The calculated costs do not take intoconsideration the material costs (vehicles, infrastructure)

� Thank You