The willingness to pay of parties to traffic accidents for loss of productivity and consolation compensation

In this study, willingness to pay (WTP) for loss of productivity and consolation compensation by parties to traffic accidents is investigated using the Tobit model. In addition, WTP is compared to compensation determined by Taiwanese courts. The modelling results showed that variables such as education, average individual monthly income, traffic accident history, past experience of severe traffic accident injuries, the number of working days lost due to a traffic accident, past experience of accepting compensation for traffic accident-caused productivity loss and past experience of accepting consolation compensation caused by traffic accidents have a positive impact on WTP. In addition, average WTP for these two accident costs were obtained. We found that parties to traffic accidents were willing to pay more than 90% of the compensation determined by the court in the scenario of minor and moderate injuries. Parties were willing to pay approximately 80% of the compensation determined by the court for severe injuries, disability and fatality. Therefore, related agencies can use our study findings as the basis for determining the compensation that parties should pay for productivity losses caused by traffic accidents of different types.