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

Recent progress in the measurement of external costs and implications for transport pricing reforms

The external cost of transport has been discussed in the European transport policy since the 60s. However, it was not until the mid-90s that the European Commission decided on a pricing policy for the transport sector. This policy has stimulated a wide array of new research on the external cost of transport. A survey of some of the most recent studies in the area displays a clear picture; the latest studies are clearly focused on the marginal external cost and based on detailed bottom-up methods. The paper summarise the methods used to estimate some of the components of the marginal cost of transport - marginal infrastructure cost, congestion and scarcity cost, accident and environmental cost. The survey displays the huge variation in the estimates that follows from the use of more detailed databases. While this may be perceived as a problem for blunt pricing policies the paper suggests that it highlights the need for a more refined pricing policy in the transport sector

Linkages: economic analysis of agriculture in the wider economy

This thesis consists of five papers, each contributing to an understanding of the role of agriculture in the wider economy, with particular emphasis on evaluation of the common agricultural policy (CAP). The first of these papers investigates the economic linkages between agriculture and the wider economy in Sweden. We develop a method for disaggregating the agricultural sector in the Swedish input-output (IO) table. Output multipliers are generally higher for livestock sectors compared to crop production and range between 1.52 and 2.20 for the open model. In the second study we develop a method for overcoming the aggregation bias associated with aggregated IO tables. Aggregation bias can be as large as 5-6 percent for agricultural sectors in a Swedish region and can be dealt with using limited and more available data to construct a disaggregated IO shock. We demonstrate how such an approach can be used for modelling reforms to the CAP. This approach minimises bias without the time and money required to do a full disaggregation of agriculture. The third paper deal with non-survey IO regionalisation. We reveal that the foundations are weak for applying standard location quotients to tables of indirect allocation of imports, so called technological coefficients. We demonstrate the sensitivity in regional multiplier analysis from doing so, using six different regional IO tables. Even the location quotient that scale down national IO coefficients the most show on average 12 percent higher regional multipliers when national technological coefficients are adjusted, rather than national trade coefficients. The fourth paper investigates the scope of hybrid governance in relation to agri-environmental and rural development policies of the CAP. We combine a survey, a case study and a stakeholder discussion and show benefits in both process and outcome that could possibly be utilised to a larger extent in implementing and developing the policy. In the fifth and final study we investigated the role of agricultural policies, specifically the environmental and rural development policies of the CAP, in promoting sustainable rural development. 20 stakeholder interviews were performed to evaluate the possibilities for agriculture and current policies to fulfil this role. One result is that environmental programs support many aspects of rural development, for instance by making some types of diversification possible

Agriculture’s inter-industry linkages, aggregation bias and rural policy reforms

As agricultural policy reform and its effects have become increasingly territorialised, analyses which attempt to explain or predict impacts need to be more localised but also identify spillover effects. In addition to the predictions of policy shocks predicted by sectoral partial equilibrium models, local and regional general equilibrium approaches which establish the wider effects of such policy shocks have become popular. However, these neglect a major, underexplored difficulty: agriculture is usually described as a single sector in input-output accounts, whereas policy shocks with differential impacts have effects on other industries which are different to those implied by average input-output coefficients. Regionalisation of aggregated input-output tables adds further to these difficulties. The objective of this paper is to develop a relatively simple method for dealing with these problems. It establishes the theoretical basis for aggregation bias and shows how it can be measured, in two contrasting case study regions in the United Kingdom and Sweden. Having established that this is a significant problem, a simple but effective procedure is demonstrated, based on additional information on variable costs, which transforms policy shocks from a direct change in agricultural output to that transmitted to the suppliers of inputs. This method provides an impact close to that which could be calculated if the general equilibrium system had indeed been disaggregated, and supports use of this approach in impact studies where the researcher does not have the time or funding available for completely disaggregating the agricultural sector’s regional accounts.agricultural and rural development policy evaluation, CAP, input-output analysis, aggregation bias, Agricultural and Food Policy,

Willingness to Pay and Sensitivity to Time Framing: A Theoretical Analysis and an Application on Car Safety

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 in a theoretical model and by using data from a Swedish contingent valuation survey. We find that WTP is sensitive to time framing; the theoretical model predicts that the effect is likely to be nontrivial, and empirical estimates from an annual scenario are about 70 percent higher than estimates from a monthly scenario.Car safety, Contingent valuation, Time frame, Willingness to pay

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

Comparing the Scandinavian automobile taxation systems and their CO2 mitigation effects

Despite their similarities, Scandinavian countries have adopted starkly different automobile tax regimes. The Danish system entails very high and convex tax rates with moderate CO2 differentiation. In Norway, tax rates are high and convex with strong CO2 differentiation and total exemptions for zero emission vehicles, even from value added tax. Sweden practices feebates – CO2 dependent subsidization along with moderate taxation. Relying on a disaggregate discrete choice model of automobile purchase, we simulate the demand for passenger cars as of 2016 in Norway under a set of conditions resembling, respectively, the Danish, Norwegian or Swedish fiscal incentives before and after recent reforms. In all cases, implications are derived in terms of energy technology market shares, average type approval CO2 emission rates, and aggregate fiscal revenue. The automobile taxation system is seen to have remarkable impacts on all three accounts. In essence, among the three jurisdictions examined, the Norwegian fiscal regime has by far the strongest CO2 abatement effect. The Danish system is less effective in terms of CO2 abatement, but provides twice as much government revenue. The Swedish feebate strategy is by far the least effective in terms of both CO2 mitigation and revenue collection.publishedVersio

Willingness to Pay and Sensitivity to Time Framing: A Theoretical Analysis and an Application on Car Safety

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 in a theoretical model and by using data from a Swedish contingent valuation survey. We find that WTP is sensitive to time framing; the theoretical model predicts that the effect is likely to be nontrivial, and empirical estimates from an annual scenario are about 70 percent higher than estimates from a monthly scenario