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Title: Do We Need Speed Limits on Freeways?
Citation Type: Miscellaneous
Publication Year: 2012
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Abstract: When choosing his speed, a driver faces a trade-o between private benefi ts (time savings) and private costs (fuel cost and own damage and injury). Driving faster also has external costs(pollution, adverse health impacts and injury to other drivers). This paper uses large-scale speed limit increases in the western United States in 1987 and 1996 to address three related questions. First, do the social benefits of raising speed limits exceed the social (private plus external) costs? Second, do the private benefi ts of driving faster as a result of higher speed limits exceed theprivate costs? Third, could completely eliminating speed limits improve efficiency? I fi nd that a 10 mph speed limit increase on highways leads to a 3-4 mph increase in travel speed, 9-15% more accidents, 34-60% more fatal accidents, and elevated pollutant concentrations of 14-25% (carbonmonoxide), 9-16% (nitrogen oxides), 1-11% (ozone) and 9% higher fetal death rates around the aff ected freeways. I use these estimates to calculate private and external benefits and costs, and fi nd that the social costs of speed limit increases are three to ten times larger than the social benefi ts. In contrast, many individual drivers would enjoy a net private benefi t from driving faster. Privately, a value of a statistical life (VSL) of $6.0 million or less justifi es driving faster, but the social planner's VSL would have to be below $0.9 million to justify higher speed limits. The substantial diff erence between private and social optimal speed choices provides a strong rationale for having speed limits. Although speed limits are blunt instruments that di ffer from an ideal Pigovian tax on speed, it is highly unlikely that any hidden administrative costs or unforeseen behavioral adjustments could make eliminating speed limits an efficiency-improving proposition.
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Authors: van Benthem, Arthur
Publisher: Stanford University
Data Collections: IPUMS USA
Topics: Other
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