Estimation of Value of Statistical Life Using Willingness-to-Pay Method: A Focus on Hangzhou, China

Rational decision-making regarding safety-related investment programs greatly depends on the economic valuation of traffic crashes. The purpose of this study is to estimate the value of statistical life (VSL) in Hangzhou, China. A stated preference survey was conducted to investigate respondents’ willingness to pay for fatality reduction. A binary logit model and a mixed logit model were developed. It is revealed that willingness to pay is affected by socioeconomic factors. The Monte Carlo simulation is used to generate the distribution of VSL for drivers, the mean of which is 3,870,402 RMB ($564,332), with a standard deviation of 2,040,194 RMB ($294,469). The VSL for non-drivers is estimated to be 3,359,281 RMB ($489,798), with a standard deviation of 1,359,281 RMB ($198,152). The tax system is used to illustrate the contribution of different income groups to social funds, the social value of statistical life is estimated to be 4,399,882RMB ($640,728).