The average speed on Danish motorways has been increasing for a number of years. In this paper we seek to provide at least a partial explanation for this development. First we establish in a micro-economic model how higher income can lead to a higher choice of speed. With increasing income, the value of time increases and the costs of driving faster decreases in importance, both operating costs and potential fines. Second, we utilize a cross-section dataset comprising 60.000 observations of car trips to perform a regression of speed on income, distance traveled and a number of controls. The results indicate a clear relationship between speed and income whereby a 100.000 kroner increase in pretax income, about 35 percent of the average income in the sample, is associated with a speed increase of 2 km/h at a longer distance.
|Title of host publication||Trafikdage på Aalborg Universitet|
|Number of pages||13|
|Publisher||Trafikforskningsgruppen på Aalborg Universitet|
|Publication status||Published - 2003|
|Event||Trafikdage - Aalborg, Denmark|
Duration: 25 Aug 2003 → 26 Aug 2003
|Period||25/08/2003 → 26/08/2003|