This article analyzes the risk perception of traffic participants by making use of Prospect Theory. This methodology makes a conceptual distinction between the perception of risk and the perception of the outcome of an uncertain event. In the field of transport safety such a distinction is desirable, because risks are typically very low and thus sensitive to misperception by traffic participants. Taking into account such misperception will significantly improve estimates of the valuation of transport safety. The first empirical results show that the valuation of losses is well represented by a utility function that is concave in shape. Secondly, our preliminary results show that individuals base their choice mainly on the possible outcomes and not so much on probabilities whenever there are very small probabilities (say ≤1/100) and "bad outcomes" involved. © 2002 Elsevier Science Ltd. All rights reserved.