Speed and Income

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Speed and Income

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Mogens Fosgerau

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Mogens Fosgerau

Abstract

The relationship between speed and income is established in a microeconomic model focusing on the trade-off between travel time and the risk of receiving a penalty for exceeding the speed limit. This is used to determine when a rational driver will choose to exceed the speed limit. The relationship between speed and income is found again in the empirical analysis of a cross-sectional dataset comprising 60,000 observations of car trips. This is used to perform regressions of speed on income, distance travelled, and a number of controls. The results are clearly statistically significant and indicate an average income elasticity of speed of 0.02; it is smaller at short distances and about twice as large at the longest distance investigated of 200 km. © 2005 LSE and the University of Bath

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Article provided by London School of Economics and University of Bath in its journal Journal of Transport Economics and Policy.

Volume (Year): 39 (2005)
Issue (Month): 2 (May)
Pages: 225-240
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Handle: RePEc:tpe:jtecpo:v:39:y:2005:i:2:p:225-240

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Web page: http://www.bath.ac.uk/e-journals/jtep

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Paper
- Mogens Fosgerau, 2004. "Speed and income," Urban/Regional 0405002, EconWPA. [Downloadable!]
- Fosgerau, Mogens, 2005. "Speed and income," MPRA Paper 12564, University Library of Munich, Germany. [Downloadable!]

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

Gander, James P., 1985. "A utility-theory analysis of automobile speed under uncertainty of enforcement," Transportation Research Part B: Methodological, Elsevier, vol. 19(3), pages 187-195, June. [Downloadable!] (restricted)
Rienstra, S.A. & Rietveld, P., 1996. "Speed behaviour of car drivers: a statistical analysis of acceptance of changes in speed policies in the Netherlands," Serie Research Memoranda 0007, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics. [Downloadable!]

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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Muhammad Sabir & Jos van Ommeren & Mark Koetse & Piet Rietveld, 2008. "Welfare Effects of Adverse Weather through Speed Changes in Car Commuting Trips," Tinbergen Institute Discussion Papers 08-087/3, Tinbergen Institute. [Downloadable!]

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