Ian Savage

An Empirical Investigation into the Effect of Psychological Perceptions on the Willingness-to-Pay to Reduce Risk

A large sample of the residents of metropolitan Chicago were interviewed to investigate whether psychometric attributes by which people view hazards are related to their willingness-to-pay to reduce the hazard. One of the hazards, stomach cancer, is found to engender fear and a high willingness-to-pay. Among the other hazards, willingness-to-pay increases with the dread of the hazard but declines with degree of knowledge people have about the risk they are exposed to. When adjustment is made for perceived probability of occurrence, one can conclude that the implied valuation of life varies across hazards according to psychometric risk perceptions. This result has practical implication for policy makers when making decisions regarding spending to reduce hazards.

The effect of firm characteristics on truck accidents

This paper expands an earlier analysis of the effect of firm characteristics and safety practices on truck accident rates. The sample size has been increased from 13,000 to 75,500. Negative binomial regressions are used in preference to the Poisson technique used previously. The current analysis confirms previous results, but provides important new insights into the safety implications of being a private carrier and hauling hazardous materials and the effect of having been in business for many years.

Why Has Safety Improved at Rail‐Highway Grade Crossings?

The number of collisions and fatalities at rail-highway intersections in the United States has declined significantly over the past 30 years, despite considerable increases in the volume of rail and highway traffic. This article disaggregates the improvement into its constituent causes. Negative binomial regressions are conducted on a pooled data set for 49 states from 1975 to 2001. The analysis concludes that about two-fifths of the decrease is due to factors such as reduced drunk driving and improved emergency medical response that have improved safety on all parts of the highway network. The installation of gates and/or flashing lights accounts for about a fifth of the reduction. The development in the 1970s and early 1980s of the Operation Lifesaver public education campaign, and the installation of additional lights on locomotives in the mid 1990s, each led to about a seventh of the reduction. Finally, about a tenth is due to closure of crossings resulting from line abandonments or consolidation of little-used crossings.

THE EFFECTIVENESS OF MOTOR CARRIER SAFETY AUDITS

In 1986 the federal government expanded its program of company inspections for enforcement of motor carrier safety regulations. We find that many parts of these inspections are unrelated to the safety performance of firms. Never the less, reinspection of firms found to be unsatisfactory in a previous inspection does appear to bring about a substantial improvement in their safety performance. However, such firms represent a small fraction of the industry, and the probability of being inspected is very low. Thus, the program does not appear to have resulted in a detectable improvement in the accident rate of the industry.

SCALE ECONOMIES IN UNITED STATES RAIL TRANSIT SYSTEMS

A three-staged least squares translog cost function is estimated for 13 heavy-rail and nine light-rail United States urban mass transit systems for the period 1985-1991. Firm output is taken to be endogenous. Large economies of density are found in operating costs. These economies become even more substantial when the cost of way and structure maintenance and capital costs are incorporated. However, there are constant returns to system size in short-run variable costs.

Deregulation and privatization of Britain's local bus industry

In 1986,the British government deregulated the majority of the local bus industry, cut the amount of subsidy, and privatized many public bus companies. Unit costs have declined significantly, cross-subsidies have been reduced, and there has been innovation in operating practices. However, mergers have increased concentration, and demand has declined due to the turmoil of service changes and the loss of network integration. In London an alternative policy has been adopted whereby there is Demsetz competition for short-term monopoly rights. The paper argues that this regime will lead to greater benefits in the long run.

Trespassing on the Railroad

More than half of the fatal injuries on the railroads in the United States are sustained by trespassers. The paper provides a statistical analysis of the demographics of trespassers, the activities the trespassers were engaged in, and the causes of injury. It also analyzes trends over time and between different parts of the country. The paper finds that the risks of injury and death are particularly acute for males in their 20s and 30s. The total number of annual casualties has remained relatively stable in recent decades because growing affluence, which tends to reduce risk-taking behavior, has been balanced by increases in railroad activity and the size of the population.

THE ECONOMICS OF RAILROAD SAFETY

Abbreviations. Preface. 1. Setting the Scene. 2. Historical Trends. 3. Public Policy. 4. How Safe are American Railroads? 5. Risk Evaluation. 6. The Story So Far. 7. Economic Theory of Bilateral Accidents. 8. Highway Grade Crossings. 9. Trespassers. 10. Occupational Injuries. 11. Benchmark Levels of Operational Safety. 12. Market Power. 13. Imperfect Information. 14. Customer Rationality. 15. Rairoad Myopia. 16. Externalities. 17. Non-Regulatory Responses. 18. Federal Safety Regulations. 19. Evaluation of Regulations. 20. A New Era for Safety Regulation. 21. The Way Forward. Appendix A: Federal Regulations. Appendix B: Historical Data. References. Subject Index.

EVALUATING TRANSIT SUBSIDIES IN CHICAGO

This paper presents a model that calculates the social welfare benefits of using additional subsidy to reduce fare levels or improve service levels of public transit in Chicago. The model differentiates between the effects in peak and off-peak periods for both bus and rapid rail service. Results of the analysis are that bus fares should be reduced during off-peak; rail fares are broadly acceptable; bus service levels are broadly acceptable, except for the peak period where they are too high; and rail service levels are too high at all times of the week, but especially in the peaks and on Sundays. In general, it is more advantageous to use subsidy monies to reduce fares than improve service levels. Even if overall subsidy levels were not increased, society would be better off if service levels were reduced, and the money saved channeled into reduction in fares.

AVIATION DEREGULATION AND SAFETY IN THE UNITED STATES: EVIDENCE AFTER TWENTY YEARS.

Ten years ago myself and my colleagues at Northwestern University organized a conference to consider whether economic deregulation of the aviation (and trucking) industries in the United States had resulted in a diminution of safety performance (Northwestern University Transportation Center, 1987; Moses and Savage, 1989a, 1990).