Estimating Values of Negative Externalities
Transport Economics
- Created by: TessAni
- Created on: 19-01-13 15:13
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- Estimating Values of Negative Externalities
- Problems
- Purely estimations
- Highly subjective - how do you monetise a life?
- Opportunity Cost argument for a commodity which has no place in the market
- Controversy over which method to use
- Methods
- Casualty costs - based on severity, age and current earnings
- Shadow Prices - a relative price that is proportional to the opportunity cost for the economy
- External cost - damage to property, insurance administration and police costs
- Replacement costs - the cost to fit triple glazing
- value of time lost, cost to economy of congestion, fuel and maintenance costs, additional vehicles required by commercial users
- Problems
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