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Keywords:

  • Bayesian learning;
  • mortality risk;
  • peers;
  • road traffic

This study examines individuals' perception of their own road-mortality risk using a Swedish data set. Individuals' subjective beliefs about their personal risk are compared with the objective risk of his/her own age and gender group, which in this study is defined as the respondents' objective risk. Both descriptive statistics and regression results suggest that low- and high-risk groups over- and underassess their risk levels, respectively. Having access to individual-level data we also find that the probability of underassessment and the size of risk bias is related to individual characteristics, for example, gender. Individuals' formation of risk perception is also analyzed based on the Bayesian learning model. Even though we find a positive relationship between perceived and objective risk, we cannot reject the hypothesis that individuals are not Bayesian in updating their risk beliefs.