Individual risk-taking and external effects- An empirical examination

Stefan M Borsky, P. A. Raschky

Research output: Chapter in Book/Report/Conference proceedingConference PaperResearchpeer-review

Abstract

Thousands of ski enthusiast surge into alpine ski resorts every year to indulge their passion and seek sensation and thrill. This sensation-seeking by the individual skiers, an increasing density on the slope and heterogeneity of skills results in around 60.000 accidents per annum on Austrian ski runs alone. The recent trend towards adventure seeking activities in the leisure time and the accompanied adverse effects for individuals and society call for appropriate adoption strategies by public policymakers and the relevant private industries alike. An appropriate approach, from an economic perspective, is to internalize the external costs of private risk-taking behaviour. We use data of 71 Austrian Ski resorts and 3,637 reported ski accidents to estimate the marginal effect of one additional skier on the amount of accidents using standard OLS-methods. These estimates build the basis for the evaluation of the external costs of risk-taking behaviour in alpine skiing. Based on this evaluation instruments can be designed to reduce socially sub-optimal demand for risk-taking activities.

Original languageEnglish
Title of host publicationSafety, Reliability and Risk Analysis: Theory, Methods and Applications - Proceedings of the Joint ESREL and SRA-Europe Conference
Pages973-979
Number of pages7
Volume2
Publication statusPublished - 2009
Externally publishedYes
EventEuropean Safety and Reliability Conference (ESREL) Annual Meeting of the Society-for-Risk-Analysis-Europe (SRA-Europe) 2008 - Valencia, Spain
Duration: 22 Sep 200825 Sep 2008

Conference

ConferenceEuropean Safety and Reliability Conference (ESREL) Annual Meeting of the Society-for-Risk-Analysis-Europe (SRA-Europe) 2008
CountrySpain
CityValencia
Period22/09/0825/09/08

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