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Pay-as-you-speed An Economic Field Experiment

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  • Lars Hultkrantz
  • Gunnar Lindberg

Abstract

We report a vehicle-fleet experiment with an economic incentive for keeping within speed limits using a speed-alert device. A traffic insurance scheme was simulated for two months with a monthly bonus that was reduced by a non-linear speeding penalty. Participants were randomly assigned into four treatment and two control groups. A third control group consisted of drivers who had the device and were monitored, but did not participate. We found that participating drivers reduced severe speeding during the first month, but in the second, after having received feedback reports with an account of earned payments, only those given a penalty changed their behaviour. © 2011 LSE and the University of Bath

Suggested Citation

  • Lars Hultkrantz & Gunnar Lindberg, 2011. "Pay-as-you-speed An Economic Field Experiment," Journal of Transport Economics and Policy, University of Bath, vol. 45(3), pages 415-436, September.
  • Handle: RePEc:tpe:jtecpo:v:45:y:2011:i:3:p:415-436
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    References listed on IDEAS

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    1. Shogren, Jason F. & Crocker, Thomas D., 1991. "Risk, self-protection, and ex ante economic value," Journal of Environmental Economics and Management, Elsevier, vol. 20(1), pages 1-15, January.
    2. David Hemenway, 1990. "Propitious Selection," The Quarterly Journal of Economics, Oxford University Press, vol. 105(4), pages 1063-1069.
    3. de Meza, David & Webb, David C, 2001. "Advantageous Selection in Insurance Markets," RAND Journal of Economics, The RAND Corporation, vol. 32(2), pages 249-262, Summer.
    4. Gunnar Lindberg, 2001. "Traffic Insurance and Accident Externality Charges," Journal of Transport Economics and Policy, University of Bath, vol. 35(3), pages 399-416, September.
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    Citations

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    Cited by:

    1. Hultkrantz, Lars & Nilsson, Jan-Eric & Arvidsson, Sara, 2012. "Voluntary internalization of speeding externalities with vehicle insurance," Transportation Research Part A: Policy and Practice, Elsevier, vol. 46(6), pages 926-937.
    2. Elvik, Rune & Ramjerdi, Farideh, 2014. "A comparative analysis of the effects of economic policy instruments in promoting environmentally sustainable transport," Transport Policy, Elsevier, vol. 33(C), pages 89-95.

    More about this item

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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