Estimation of social value of statistical life using willingness-to-pay method in Nanjing, China.

Rational decision making regarding the safety related investment programs greatly depends on the economic valuation of traffic crashes. The primary objective of this study was to estimate the social value of statistical life in the city of Nanjing in China. A stated preference survey was conducted to investigate travelers' willingness to pay for traffic risk reduction. Face-to-face interviews were conducted at stations, shopping centers, schools, and parks in different districts in the urban area of Nanjing. The respondents were categorized into two groups, including motorists and non-motorists. Both the binary logit model and mixed logit model were developed for the two groups of people. The results revealed that the mixed logit model is superior to the fixed coefficient binary logit model. The factors that significantly affect people's willingness to pay for risk reduction include income, education, gender, age, drive age (for motorists), occupation, whether the charged fees were used to improve private vehicle equipment (for motorists), reduction in fatality rate, and change in travel cost. The Monte Carlo simulation method was used to generate the distribution of value of statistical life (VSL). Based on the mixed logit model, the VSL had a mean value of 3,729,493 RMB ($586,610) with a standard deviation of 2,181,592 RMB ($343,142) for motorists; and a mean of 3,281,283 RMB ($505,318) with a standard deviation of 2,376,975 RMB ($366,054) for non-motorists. Using the tax system to illustrate the contribution of different income groups to social funds, the social value of statistical life was estimated. The average social value of statistical life was found to be 7,184,406 RMB ($1,130,032).