Value of Time: Speeding Behavior and Gasoline Prices
Do drivers reduce speeds when gasoline prices are high? Previous research investigating this energy conservation hypothesis produced mixed results. We take a fresh look at the data and estimate a significant negative relationship between speeding and gasoline prices. This presents a new methodology of deriving the 'Value of Time' (VOT) based on the intensive margin (previous VOT studies compare across the extensive margin) which has important advantages to circumvent potential omitted variable problems. While our VOT is 50% of the gross wage rate, we show that previous stated preference estimates are likely downward, whereas previous revealed preference estimates are systematically upward biased. We discuss implications, as VOT today is a key parameter in economics and policy.
|Date of creation:||Aug 2012|
|Date of revision:|
|Publication status:||published in: Journal of Environmental Economics and Management, 2014, 67(1), 71-88.|
|Contact details of provider:|| Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany|
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org
|Order Information:|| Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany|
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.:
- Austin, David & Dinan, Terry, 2005. "Clearing the air: The costs and consequences of higher CAFE standards and increased gasoline taxes," Journal of Environmental Economics and Management, Elsevier, vol. 50(3), pages 562-582, November.
- Calfee, John & Winston, Clifford, 1998. "The value of automobile travel time: implications for congestion policy," Journal of Public Economics, Elsevier, vol. 69(1), pages 83-102, July.
- Daniel J. Phaneuf & Catherine L. Kling & Joseph A. Herriges, 2000.
"Estimation and Welfare Calculations in a Generalized Corner Solution Model with an Application to Recreation Demand,"
The Review of Economics and Statistics,
MIT Press, vol. 82(1), pages 83-92, February.
- Phaneuf, Daniel J. & Kling, Catherine L. & Herriges, Joseph A., 2000. "Estimation and Welfare Calculations in a Generalized Corner Solution Model with an Application to Recreation Demand," Staff General Research Papers Archive 1355, Iowa State University, Department of Economics.
- Daniel J. Phaneuf & Catherine L. Kling & Joseph A. Herriges, 1998. "Estimation and Welfare Calculations in a Generalized Corner Solution Model with an Application to Recreation Demand," Center for Agricultural and Rural Development (CARD) Publications 99-wp207, Center for Agricultural and Rural Development (CARD) at Iowa State University.
- Bento, Antonio M. & Goulder, Lawrence H. & Jacobsen, Mark R. & von Haefen, Roger H., 2007.
"Distributional and Efficiency Impacts of Increased U.S. Gasoline Taxes,"
127021, Cornell University, Department of Applied Economics and Management.
- Antonio M. Bento & Lawrence H. Goulder & Mark R. Jacobsen & Roger H. von Haefen, 2009. "Distributional and Efficiency Impacts of Increased US Gasoline Taxes," American Economic Review, American Economic Association, vol. 99(3), pages 667-99, June.
- Dahl, Carol A, 1979. "Consumer Adjustment to a Gasoline Tax," The Review of Economics and Statistics, MIT Press, vol. 61(3), pages 427-32, August.
- Vickrey, William S, 1969. "Congestion Theory and Transport Investment," American Economic Review, American Economic Association, vol. 59(2), pages 251-60, May.
- Shanjun Li & Roger von Haefen & Christopher Timmins, 2008.
"How Do Gasoline Prices Affect Fleet Fuel Economy?,"
NBER Working Papers
14450, National Bureau of Economic Research, Inc.
- Nicholas E. Burger & Daniel T. Kaffine, 2009. "Gas Prices, Traffic, and Freeway Speeds in Los Angeles," The Review of Economics and Statistics, MIT Press, vol. 91(3), pages 652-657, August.
- John Calfee & Clifford Winston & Randolph Stempski, 2001. "Econometric Issues In Estimating Consumer Preferences From Stated Preference Data: A Case Study Of The Value Of Automobile Travel Time," The Review of Economics and Statistics, MIT Press, vol. 83(4), pages 699-707, November.
- Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004.
"How Much Should We Trust Differences-In-Differences Estimates?,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 119(1), pages 249-275.
- Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2002. "How Much Should We Trust Differences-in-Differences Estimates?," NBER Working Papers 8841, National Bureau of Economic Research, Inc.
- Thomas Klier & Joshua Linn, 2010. "The Price of Gasoline and New Vehicle Fuel Economy: Evidence from Monthly Sales Data," American Economic Journal: Economic Policy, American Economic Association, vol. 2(3), pages 134-53, August.
- Kenneth E. Train, 1998. "Recreation Demand Models with Taste Differences over People," Land Economics, University of Wisconsin Press, vol. 74(2), pages 230-239.
When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp6788. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak)
If references are entirely missing, you can add them using this form.