On the Valuation of Transport Externalities: Application of Willingness-to-Pay Methods in Less Developed Countries

In this paper we explore the potential for, and application of, Willingness-to-Pay (WTP) methods for valuing transport externalities in less developed countries. We outline examples of monetary valuation, the contexts in which they are applied and the extent to which they are given official support. Two applications of the WTP approach in Santiago, Chile, are presented. The first involves a contingent valuation study of mortality risk due in part to pollution-related causes, and the second, a stated preference study for the valuation of road fatalities. Our conclusions are that the approaches, and particularly that based on stated preference methods, offer practical and consistent methods for establishing unit values in higher income developing countries. The numerical results derived from the WTP methods appear to justify a greater allocation of resources to safety and pollution countermeasures compared with those derived from more traditional approaches. Submitted to the Journal of Transport Economics and Policy November 1999 1. Department of Transport Engineering, Pontificia Universidad Católica de Chile, Santiago, Chile Email: [email protected] 2. Department of Industrial and Systems Engineering, Pontificia Universidad Católica de Chile, Santiago, Chile; Email: [email protected] 3. Department of City and Regional Planning, Cardiff University, Cardiff, UK. Email: [email protected]