Necessary Speed Limits?
In How to Think Like an Economist, Roger Arnold mentions that in the absence of speed limits we should expect more crashes and deaths than with the current regulations. I disagree.
In the absence of a speed limit every driver has an incentive to drive faster. However every single driver also realizes that everyone else is driving faster and that in such conditions any casualties might be fatal. Because of this each individual driver has an incentive to pay a lot more attention when driving than when speed limits exist. The final result is that people might be driving faster but will also be a lot more careful when driving. Therefore, the occurrence of more crashes and deaths does not necessarily follow.
Whether driving without speed limits is more dangerous is an empirical questions that cannot be answered a priori. My guess is that the number of crashes with and without speed limits in highways might be similar in either case otherwise the famous Autobahns in Germany would have a speed limit regulation.
If I were to be a social planner I would probably choose to eliminate any speed limits in highways and save on enforcing costs. However, I would still enforce speed limits in urban areas to reduce the number of pedestrians that are hit by cars.
posted by bcj @ 9:10 PM
3 comments
3 Comments:
Is this blog a testament to what happens when a person is exposed to deadly economic rays for too long? -Lewis
Having only just recently purchased a car, I've had the opportunity to be a passenger on many car rides. Individuals appear to have varying preferences when it comes to speeding. They appear to take into account the law, feeling of insecurity, fear hitting a pedestrian, among others.
In that imaginary land where we have perfect information could we do with out speed limits on the sole basis of litagition. Basically sue up the wazoo whoever caused the crash? People will probably drive slower and pay more attention when they aren't in a hurry. However, if they want to risk a wreck and the ensuing monetary consequences they are free too.
May need a debtor's prison to make this work.
Hey JuanCarlos, I just read some of your blog entries and they're pretty interesting, since I find myself increasing framing random observations and decisions in terms of economics too.
For the most part, I agree with what you've said about speed limit on roads, but here's something to consider: In the absence of speed limits on highways, the equilibrium point between driving speed and safety is different for each driver. One implication of this is that drivers that achieve equilibrium at a higher speeds (e.g. younger drivers) effect negative externalities aside from injury or death, such as anxiety and road rage, on drivers whose equilibrium speed is lower (e.g. older drivers, like my parents).
How does fear/rage on the road affects one's probability of crashing? Could a speed limit give some people a sense of security that translates into safer driving?
However, these negative externality exists with or without speed limits... I guess it depends if a social planner wants to take into account such psychological factors.
Keep posting!
Steven Pong
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