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OF DRIVING WITHOUT A LICENCE - page 7 / 14

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  • 3.

    DATA USED

    • 3.1

      Drivers’ willingness to pay

Jørgensen and Wentzel-Larsen (2002) estimated Norwegian drivers’ willingness to pay for not losing their driving license for 6 months, 12 months and 24 months. The data set used was collected by the Institute of Marketing Research in Norway in 1997 and 1287 driving license holders answered, among other things, the following question: “Supposing you have been caught for a serious traffic offence implying suspension of your driving license. What is the maximum amount you are willing to pay for not losing your driving license for 6 months, 12 months and 24 months?” For a thorough

description and discussion of the survey and data collection procedure, we refer to the above work.

Table 1. Norwegian drivers’ willingness to pay for not losing their driving license for 12

months and 24 months in 1997 (Nkr)*.

Reported values (WP)

Undiscounted values (WP*)

Ratio undiscounted values -

12 months, WP12 = 8.985

12 months, WP = 9065

* 12

24 months, WP24 = 14.244

24, months, WP = 14624

* 24

* 1 2 * 2 4 W P W P

= 1.62

*1€ ≈ 8 Nkr

The average reported values and average undiscounted values for WP12 and WP24 are shown in Table 1. One striking feature with these results is that the value of WP24 is not twice as high as WP12. This may partly be explained by the discounting of future disadvantages of not having a driving license and partly by their greater opportunity to change life style and travel patterns the longer the time horizon. Taking the first factor into account by adjusting the WP24 value using an interest rate of 3.5 % per year (Hervik, 2004), or 1.76 % per 6th month, the undiscounted WP’s (WP*) still show that the ratio

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