The valuation of casualties saved; Memorandum with the PhD thesis ‘The value of a statistical life in road safety'. Crashes cause all kinds of social costs, among which immaterial damage. Immaterial damage, also called ‘human losses', is defined by the loss of quality of life for victims and their next of kin. They are costs in the form of pain, sorrow and a diminished joy of living. It is important for policy and research in support of policy to be able to put a monetary value on this kind of damage. In this manner the total cost of road crashes can be determined, and cost-benefit analyses of road safety measures can be made. Until recently the Netherlands did not have well-founded values, but Vrije Universiteit Amsterdam (VU) in cooperation with SWOV, did extensive research into the value of immaterial damage of fatal crashes for car drivers. This report attempts to make the result of this research available for policy makers. It also includes recommendations about which new values for immaterial damage of fatal crashes can be used in policy. The VU research estimated what is known as ‘Value of a Statistical Life' (VOSL). This concept was developed to standardize the valuation of safety, including the valuation of immaterial damage. This concept is also often used in other fields than road safety. The concept ‘Willingness to Pay', the amount people are willing to pay for a certain reduction of the crash rate, is used to determine the VOSL. This concept originates from welfare economics, and makes it possible to put a price tag on a risk reduction and thus on the saving of ‘statististical' human lives. To make an estimate of the VOSL in the Netherlands, car drivers were directly or indirectly asked in a questionnaire what they are willing to pay for safety measures. They were asked to weigh safety, travelling time, and money. First they were given a choice between two toll roads which differed in price, safety, and travelling time. This question resulted in a VOSL of 2.2 million euro with a confidence interval of 1.9 to 2.5 million euro. Next, drivers were also asked to choose between three different types of one car, which only differed in price and safety. They were also asked for the maximum amount which they would be prepared to pay for one of the types. This question resulted in a higher VOSL of 5 million euro. The research indicates that the VOSL depends, amongst others, on the road safety measure (for instance its public or private nature) and the target group of the measure (car drivers, cyclists, pedestrians, etc.). However, it is undesirable, but also unfeasible to use a different VOSL in each case. SWOV recommends using the lowest of the two values found, a VOSL of 2.2 ± 0.3 million euro (price level 2001), as a standard in cost-benefit analyses and in research into the costs of road crashes. Beside the ‘human losses' (immaterial damage) of a traffic fatality, this amount also comprises a material component: the value of the loss of consumption in the lost years of life. If the VOSL is corrected for this loss of consumption, the result is a value of 1.8 ± 0.3 million euro for the ‘human losses' of a traffic fatality. If required, a second, larger margin can be used for the VOSL: 1.6 to 3.0 million euro (price level 2001). These values are based on some international studies which, amongst others, also determine a VOSL for the Netherlands. The amount of 1.6 million euro is used in a European recommendation for the use of the VOSL in policy, which uses a conservative approach. The amount of 3.0 million euro is a scientifically sound upper margin. The VOSL depends on several circumstances which can change in the course of time, like socio-economic features and preferences of the population. That's why the recommendation is to update the VOSL periodically, for instance once every five years, as is also done for the valuation of travelling time. The VU research has only determined the VOSL of traffic fatalities. Due to the much higher number of hospital injuries, immaterial damage of non-fatal injuries also is a substantial part of the cost of road crashes. However, a thorough basis for the valuation of 'human losses' for injuries is as yet not available in the Netherlands. That is why research into the 'human losses' for injuries in the Netherlands is also recommended.
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