Accident costing using value transfers: New unit costs for personal injuries in Finland

Juha Tervonen

Research output: Book/ReportReport

1 Citation (Scopus)

Abstract

The study deals with valuation of economic losses resulting from personal injuries of road traffic accidents. In particular, valuation of human welfare losses is examined. The study presents an analysis of valuation methodogies currently used in Finland and some other countries for estimating the unit values of personal injuries. The theoretically correct method for valuing human welfare losses according to economics is presented and recommendations for a new practice for Finland are made accordingly. The individual willingness-to-pay method is proposed to be adopted for valuing the changes in accident risk subjectively. This method will produce theoretically consistent risk values for representing human losses of traffic accidents. The theoretical foundation of the methodology also highlights how economics considers the welfare impacts of living in risky environments. A change in valuation methodology immediately calls for revising the currently used unit values in Finnish highway economics. Therefore, the study examines the whole range of existing value estimates and their components. However, no empirical cost inventories or valuation surveys are carried out. The new unit costs for personal injuries are based on both an earlier cost inventory and values transferred from Sweden. The applicability of such value transfers is discussed theoretically. Finally, the study presents a proposal on unit costs for personal injuries recommended to be applied in project appraisals and socio-economic costing of transport in Finland.
Original languageEnglish
Place of PublicationEspoo
PublisherVTT Technical Research Centre of Finland
Number of pages116
ISBN (Electronic)951-38-5398-5
ISBN (Print)951-38-5397-7
Publication statusPublished - 1999
MoE publication typeD4 Published development or research report or study

Publication series

SeriesVTT Publications
Number396
ISSN1235-0621

Fingerprint

Finland
Value transfer
Unit cost
Accidents
Costing
Economics
Methodology
Inventory cost
Welfare loss
Unit values
Traffic accidents
Willingness-to-pay
Economic loss
Project appraisal
Sweden
Socio-economics
Roads

Keywords

  • unit costs
  • traffic accidents
  • accident costs
  • Finland
  • transportation
  • injuries
  • values
  • risks
  • economic analysis
  • value transfers

Cite this

Tervonen, J. (1999). Accident costing using value transfers: New unit costs for personal injuries in Finland. Espoo: VTT Technical Research Centre of Finland. VTT Publications, No. 396
Tervonen, Juha. / Accident costing using value transfers : New unit costs for personal injuries in Finland. Espoo : VTT Technical Research Centre of Finland, 1999. 116 p. (VTT Publications; No. 396).
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Tervonen, J 1999, Accident costing using value transfers: New unit costs for personal injuries in Finland. VTT Publications, no. 396, VTT Technical Research Centre of Finland, Espoo.

Accident costing using value transfers : New unit costs for personal injuries in Finland. / Tervonen, Juha.

Espoo : VTT Technical Research Centre of Finland, 1999. 116 p. (VTT Publications; No. 396).

Research output: Book/ReportReport

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AB - The study deals with valuation of economic losses resulting from personal injuries of road traffic accidents. In particular, valuation of human welfare losses is examined. The study presents an analysis of valuation methodogies currently used in Finland and some other countries for estimating the unit values of personal injuries. The theoretically correct method for valuing human welfare losses according to economics is presented and recommendations for a new practice for Finland are made accordingly. The individual willingness-to-pay method is proposed to be adopted for valuing the changes in accident risk subjectively. This method will produce theoretically consistent risk values for representing human losses of traffic accidents. The theoretical foundation of the methodology also highlights how economics considers the welfare impacts of living in risky environments. A change in valuation methodology immediately calls for revising the currently used unit values in Finnish highway economics. Therefore, the study examines the whole range of existing value estimates and their components. However, no empirical cost inventories or valuation surveys are carried out. The new unit costs for personal injuries are based on both an earlier cost inventory and values transferred from Sweden. The applicability of such value transfers is discussed theoretically. Finally, the study presents a proposal on unit costs for personal injuries recommended to be applied in project appraisals and socio-economic costing of transport in Finland.

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Tervonen J. Accident costing using value transfers: New unit costs for personal injuries in Finland. Espoo: VTT Technical Research Centre of Finland, 1999. 116 p. (VTT Publications; No. 396).