Document Type
Article
Publication Title
Journal of Law and Economics
Publication Date
1995
ISSN
0022-2186
Page Number
79
Keywords
automobiles, safety, hedonic damages
Disciplines
Consumer Protection Law | Law
Abstract
This article estimates hedonic price models for automobiles using a data set on almost 3,000 households from the U.S. Department of Energy Residential Transportation Energy Consumption Survey. The standard hedonic models are generalized to recognize the role of discounting of fuel efficiency and safety, yielding an estimated rate of time preference ranging from 11 to 17 percent. This range includes the prevailing rate of interest for car loans in 1988 and is consequently consistent with market rates. Purchasers exhibit an implicit value of life ranging from $2.6 to $3.7 million, which is within the range found in the labor market as well as other market contexts. The model also estimates a significant price effect for auto injury risks and fuel efficiency.
Recommended Citation
W. Kip Viscusi and Mark K. Dreyfus,
Rates of Time Preference and Consumer Valuations of Automobile Safety and Fuel Efficiency, 38 Journal of Law and Economics. 79
(1995)
Available at: https://scholarship.law.vanderbilt.edu/faculty-publications/103