Traffic safety: Speed limits, strict liability and a km tax
This paper focuses on two specific determinants of accidents: speed and the activity level. If there is no government intervention, people do not take into account the full cost of their driving and they will drive too fast and too much. In our setting, the government can use three instruments to influence the behaviour of people: speed limits, strict liability and a kilometre tax. We analyse the choice of the speed and activity level under the different instruments and determine the optimal combinations. Given our assumptions we never reach the social optimum. The results are illustrated with a numerical example.
Volume (Year): 40 (2006)
Issue (Month): 3 (March)
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- John Peirson & Ian Skinner & Roger Vickerman, 1996.
"The Microeconomic Analysis of the External Costs of Road Accidents,"
Studies in Economics
9606, School of Economics, University of Kent.
- Peirson, John & Skinner, Ian & Vickerman, Roger, 1998. "The Microeconomic Analysis of the External Costs of Road Accidents," Economica, London School of Economics and Political Science, vol. 65(259), pages 429-40, August.
- Steven Shavell & A. Mitchell Polinsky, 2000.
"The Economic Theory of Public Enforcement of Law,"
Journal of Economic Literature,
American Economic Association, vol. 38(1), pages 45-76, March.
- Eef Delhaye, 2004. "Traffic safety: speed limits, strict liability and a km tax," Energy, Transport and Environment Working Papers Series ete0407, KU Leuven, Department of Economics - Research Group Energy, Transport and Environment.
- Keller, Wouter J., 1976. "A nested CES-type utility function and its demand and price-index functions," European Economic Review, Elsevier, vol. 7(2), pages 175-186, February.
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