Speed and income

Mogens Fosgerau

    Research output: Contribution to journalJournal articleResearchpeer-review

    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.
    Original languageEnglish
    JournalJournal of Transport Economics and Policy
    Volume39
    Issue number2
    Pages (from-to)225-240
    ISSN0022-5258
    Publication statusPublished - 2005

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