Mitigating Hypothetical Bias in Value of Time Studies: Lab-Experiment Results

We present results from a series of willingness to-accept value-of-time choice experiments with students in Sweden and China, using both real and hypothetical purchases of the students´ time. Our results confirm negative hypothetical bias in stated choice elicitation of value-of-time. However, we find no evidence of hypothetical bias in a choice experiment where respondents to hypothetical or real offers have equal reference points (i.e., for purchase of their time “here and now”). Moreover, at least in the Chinese sample, we find that ex-post mitigation of negative hypothetical bias by certainty calibration, through recoding of uncertain “yes” responses into “no”, overshoots, while calibration by restricting estimations to confident “yes” and “no” responses possibly performs better.Stated choice; Certainty calibration; Preference certainty

PAY-AS-YOU-SPEED: AN ECONOMIC FIELD-EXPERIMENT

We report a vehicle-fleet experiment with an economic incentive given to car drivers for keeping within speed limits. A pay-as-you-speed traffic insurance scheme was simulated with a monthly participation bonus that was reduced by a non-linear speeding penalty. Actual speed was monitored by a GPS in-vehicle device. Participating drivers were randomly assigned into two-by two treatment groups, with different participation-bonus and penalty levels, and two control groups (high and low participation bonus, but no penalty). A third control group consists of drivers with the same technical equipment who did not participate but whose driving could be monitored. We evaluate changes in behaviour from twelve-month differences in proportion of driving time per month that the car was exceeding the maximum allowed speed on the road. We find that the participating drivers significantly reduced severe speeding violations during the first experiment month, while in the second experiment month, after having received feedback reports with an account of earned payments, only those participating subjects that were given a speeding penalty reduced severe speed violations. We find no significant effects from the size of the participation bonus (high vs. low), or the size of the penalty (high vs. low rate).Traffic insurance; traffic safety; Intelligent Transport Systems; ITS; Intelligent Speed Adaptation; ISA

Pay-as-you-speed: Two Field Experiments on Controlling Adverse Selection and Moral Hazard in Traffic Insurance

Around one million people are killed world wide every year in road-traffic accidents. The risks and consequences of accidents increase progressively with speed, which ultimately is determined by the individual driver. The behaviour of the motorist thus affects both her own and other peoples safety. Internalisation of external costs of road transport has hitherto been focused on distance-based taxes or insurance premiums. While these means, as they are designed today, may affect driven distance, they have no influence on driving behaviour. This paper argues that by linking on-board positioning systems to insurance premiums it is possible to reward careful driving and get drivers to self select into different risk categories depending on their compliance to speed limits. We report two economic field experiments that have tested ways to induce car-owners to have technical platforms installed in their vehicle in order to affect the extent of speeding. It is demonstrated that a bonus to remunerate those that have the device installed, tantamount to a lower insurance premium, increases drivers?propensity to accept the technical devices. In a second experiment the size of the bonus is made dependent on the actual frequency of speeding. We find that this is a second way to discipline users to drive at legal speeds.Traffic safety, impure public goods, moral hazard, adverse selection, self selection

Economic Evaluation of Supported-Employment Inspired Program for Pupils With Intellectual Disabilities

In this study, we investigate whether, or to what degree, a ‘business case’ could be made for implementation of a Supported-Employment (SE) inspired program for pupils with intellectual disabilities (IDs), starting during the final school years. For this aim, we do a quasi-experimental before-after intervention impact evaluation of such a project funded by the European Social Fund in the Swedish city of Örebro (135,000 inhabitants) during 2010–2013. From an estimate of the average treatment effect, we calculate the internal net present value and the payback period that would make this program break even from avoided expenditure for day-activity services, assuming that it had been funded entirely by the municipality

INSURANCE COSTS AND ACCIDENT RISKS

Discussion Paper No. 2011-26 Accident cost, speed and vehicle mass externalities, and insuranc

Investeringar i infrastruktur och tillväxt

Infrastrukturinvesteringar ses ofta som ett viktigt medel att påverka den ekonomiska tillväxten. Denna policyrapport inleds med en kort översikt över den svenska debatten och speciellt kring svårigheten att förena det mikroekonomiska perspektivet med det makroekonomiska. Därefter ges en kort översikt om vilken kunskap som finns idag om huruvida satsningar på infrastruktur verkligen bidrar till ökad tillväxt. Rapporten utmynnar sedan i några avslutande rekommendationer riktade till beslutsfattare som grundas på professor Lars Hultkrantz egna insikter efter att över en längre tid följt både forskningen och den svenska debatten kring infrastrukturplaneringen

Accident cost, speed and vehicle mass externalities, and insurance

Pay-As-You-Drive (PAYD) automobile insurance enables insurers to charge the vehicle owner per mile instead of a pre-set number of miles per year. PAYD is offered to motorists on an optional basis, i.e., they can also choose a conventional scheme. PAYD insurance builds on the improved possibilities brought by new in-vehicle technologies for measuring distance driven. However, there is a range of other risk factors that could be supervised, some of which are already used by the insurance industry. For instance, one Swedish insurance provider charges a lower premium to vehicles that have an alco-lock installed to make it impossible to use the vehicle for an intoxicated driver. In this report, we summarize some work we have done on how to incorporate two of the most important risk factors; vehicle mass and speed. The possibility to differentiate insurance premiums according to various risk factors raises questions on the interaction between vehicle insurance schemes and taxes. Distance driven, speeding and vehicle mass are in many countries subject to taxation (for instance gasoline tax for distance, speeding tickets for speed and vehicle tax for vehicle mass). We will briefly discuss how a PAYD scheme with a speeding penalty (this will here be called Pay As You Speed, PAYS) can be combined with taxes to implement a Pigou taxation of road accident externalities. We summarize results from a vehicle-fleet experiment with a PAYS insurance incentive for keeping within speed limits using a speed-alert device. The PAYS scheme was simulated with a monthly bonus to participants during two months reduced by a non-linear speeding penalty. We analyse this \u93mass externality\u94 using a database including collision accidents in Sweden involving two passenger cars during five years. Finally, we discuss different solutions to internalization of this external accident cost. We calculate a mass dependent multiplicative tax on the insurance premium in a no-fault insurance system