Munich Personal RePEc Archive

Speed and income

Fosgerau, Mogens (2005): Speed and income. Published in: Journal of Transport Economics and Policy , Vol. 39, No. 2 : pp. 225-240.

[img]
Preview
PDF
MPRA_paper_12564.pdf

Download (134Kb) | Preview

Abstract

The relationship between speed and income is established in a microeconomic model focusing on the trade-off between travel time and the risk of receiving a penalty for exceeding the speed limit. This is used to determine when a rational driver will choose to exceed the speed limit. The relationship between speed and income is found again in the empirical analysis of a cross-sectional dataset comprising 60,000 observations of car trips. This is used to perform regressions of speed on income, distance travelled, and a number of controls. The results are clearly statistically significant and indicate an average income elasticity of speed of 0.02; it is smaller at short distances and about twice as large at the longest distance investigated of 200 km.

UB_LMU-Logo
MPRA is a RePEc service hosted by
the Munich University Library in Germany.