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Efficiency of speed limits in cities: A spatial computable general equilibrium assessment

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  • Nitzsche, Eric
  • Tscharaktschiew, Stefan

Abstract

Road traffic speed limits are suggested to be associated with, e.g., changes in travel times, vehicle operating costs, accidents, noise and emissions. In this paper we analyze the impacts of speed limit policies, i.e. restricting the maximum permissible road traffic speed, on an urban economy. While most existing studies do only focus on the effects of speed limits on frequency and severity of accidents, we provide a more general assessment of speed limit policies by employing a spatial computable general equilibrium model calibrated to an ‘average’ German metropolitan area. It is shown that besides transport related effects additional economic effects may influence the overall performance of speed limit policies significantly. Driven by spatial economic effects, tightening speed limits on all roads, i.e. setting a general urban speed limit of, e.g. 30km/h, lowers aggregate social welfare, although aggregate environmental and accident costs decline. However, setting speed limits around the city center only and not in suburban areas with access to beltways curtails negative effects on the urban economy and, in the end, may result in overall welfare gains. Therefore, our results suggest that implementing a general speed limit uniformly in the entire urban area, thus paying no attention to the spatial shape of the city and its road network, is likely to be an inadequate measure to enhance social welfare. However, restricting speed limits locally, thus focusing on the design of a ‘slow zone’, is essential and, in the end, is a more promising speed regulation policy having more likely the chance to enhance social welfare.

Suggested Citation

  • Nitzsche, Eric & Tscharaktschiew, Stefan, 2013. "Efficiency of speed limits in cities: A spatial computable general equilibrium assessment," Transportation Research Part A: Policy and Practice, Elsevier, vol. 56(C), pages 23-48.
  • Handle: RePEc:eee:transa:v:56:y:2013:i:c:p:23-48
    DOI: 10.1016/j.tra.2013.08.004
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    References listed on IDEAS

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    Cited by:

    1. Georg Hirte & Stefan Tscharaktschiew, 2015. "Optimal Fuel Taxes and Heterogeneity of Cities," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 35(2), pages 173-209, October.
    2. Tscharaktschiew, Stefan, 2014. "Shedding light on the appropriateness of the (high) gasoline tax level in Germany," Economics of Transportation, Elsevier, vol. 3(3), pages 189-210.
    3. He, Sheng-Xue, 2016. "Will a higher free-flow speed lead us to a less congested freeway?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 85(C), pages 17-38.
    4. Martijn I. Dröes & Piet Rietveld†, 2014. "The Effect of Railway Travel on Urban Spatial Structure," Tinbergen Institute Discussion Papers 14-050/VIII, Tinbergen Institute.
    5. Georg Hirte & Stefan Tscharaktschiew, 2015. "Why not to choose the most convenient labor supply model? The impact of labor supply modeling on policy evaluation," ERSA conference papers ersa15p303, European Regional Science Association.
    6. Dröes, Martijn I. & Rietveld, Piet, 2015. "Rail-based public transport and urban spatial structure: The interplay between network design, congestion and urban form," Transportation Research Part B: Methodological, Elsevier, vol. 81(P2), pages 421-439.
    7. Fan, Jin & He, Haonan & Wu, Yanrui, 2016. "Personal carbon trading and subsidies for hybrid electric vehicles," Economic Modelling, Elsevier, vol. 59(C), pages 164-173.

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