Valuing motorcycle casualties in developing countries using willingness-to pay method :stated-preference discrete choice modelling approach

Abstract

Motorcycle ownership and use in developing cities in Asia, including Surabaya and Jakarta (Indonesia), Kuala Lumpur (Malaysia) and Bangkok (Thailand) have increased dramatically over the past few decades. With this high rate of growth, there is evidence of an increase in the number of motorcycle casualties. Currently, efforts to reduce road casualties in general, and to reduce motorcyclist casualties in particular, have attracted considerable attention in developing countries, especially where motorcycle casualties have risen rapidly, for instance, in Indonesia. Necessary road safety improvements will demand substantial funding which the respective local and regional authorities of the countries generally support. To provide information to policy makers, in particular on how much saving can be gained by implementing road safety improvements, it is very important to have an accurate technique for valuing a road casualty. Various techniques are available to value road casualties however the appropriate method will depend on the objectives and balancing conflicting objectives such as whether to maximise the country’s Gross Domestic Product (GDP) or strengthen social welfare. At present, most of the developing countries, including Indonesia, use the Gross Output method to value the casualties; the objective of this method is to maximise the GDP. On the other hand, most of the developed countries prefer to use the Willingness to Pay method, which combines welfare objectives with cost-benefit analysis. The cost-benefit analysis is needed on the valuation of safety improvement program. The Willingness to Pay method was devised to determine the value of preventing casualties and to strengthen the social welfare objectives. This research uses the Willingness to Pay method for valuing motorcyclist casualty costs. In order to investigate the similarities, differences and interaction between the two, the Gross Output method also is used to estimate the motorcycle casualty costs. The case study used for this research is Surabaya city in Indonesia where the number of motorcycle casualties has increased substantially since the early 1990s. This study identifies that the Discrete Choice Modelling technique is appropriate to put a value of the Willingness to Pay. The study also delivers a basic understanding of the relationship between social attitudes and motorcycle-related casualty reductions; it considers three casualty classes: slight, serious with no disability and serious with disability. The research produced statistically significant evidence suggesting that the older population is less likely to support investments to reduce casualties. However, the reverse is true for households with higher income and more children. Finally the Willingness to Pay method was shown to be a suitable technique to be used in developing countries to measure the value of motorcycle casualties. Key words: Motorcycle Safety Valuation, Willingness-to-Pay, Stated-Preference Surveys, Discrete Choice Models