Speed limits and traffic deaths June 9, 2008Posted by Jeff in Economics, Politics.
With the price of gas rising, there is increased murmuring about legislating a lower speed limit in order to conserve fuel. I remarked to family this weekend that that seems to be an odd thing to attempt to legislate. Here’s why:
In 1974, the federal government legislated a national speed limit of 55 miles per hour in response to the fuel crisis of 1973. The rationale at the time was that fuel prices were high, oil was running out, and our only option was to start conserving what was left. After the fuel crisis passed, the federal speed limit was kept in place because of safety reasons: in the first few months of the federally mandated speed limit, traffic deaths actually dropped. There are two problems with this public policy: the first is economic and the second is ability to deliver on promised results.
The first problem with the federally limited speed is that it is not an economically sound policy. For example, while it was true that fuel prices were high and it was true that oil was running out, it was not true that oil was running out soon. Fossil fuels are, and should be treated as, finite resources. That said, there is so much oil available, that we Earthlings will not use up our supply for decades, if not centuries. A more economically sound way of expressing the problem is that there’s only so much oil available at a certain price. If oil costs $20/barrel, there will be less supply than if oil costs $200/barrel, because a the cheaper price restricts the amount of cost that can go into retrieving the oil. If oil were to reach $200/barrel, it would become feasible to extract oil from places that are not financially feasible to extract from at $20/barrel. Therefore, legislating a lower speed limit for the purposes of conserving a resource for which plenty of supply exists is bad public policy. In fact, it turned out that the conservation initiative only resulted in saving about 1% of the oil that otherwise would have been consumed. (Source: http://www.heritage.org/Research/SmartGrowth/bg532.cfm)
The second problem with the federal speed limit is that its supposed benefits did not stand the test of time. The drop in traffic deaths that was reported in the year following the mandated lower speed had actually vanished by 1978 and was really no more than a short term anomaly. (Source: http://www.cato.org/pub_display.php?pub_id=1205) Consider also that when the federal mandate was removed in 1995, the number of traffic deaths per mile travelled began to decline – as of 2006, the most recent year for which I can find data, the NHTSA reports that the number of traffic fatalities per vehicle mile travelled has decreased by 18.5% over their level in 1994, the year before the federally-mandated speed was lifted. (Source: http://www-fars.nhtsa.dot.gov/Main/index.aspx)
An interesting question that arises is “How many more deaths could be prevented if we raised speed limits even higher?” In fact, what if we took the extreme position of having no speed limits altogether? It turns out that we actually have data that proves that removing the speed limit altogether actually reduces traffic deaths. When the federal speed limit was lifted in 1995, the state of Montana had effectively no speed limit, a regulation that was ultimately struck down for its “vagueness”. Nevertheless, before it was struck down, Montana saw its traffic fatalities fall to record low levels. When the statute was struck down and Montana reinstated numerical speed limits, the fatality rate immediately began to climb. Similar data exists for the comparison between the German autobahn, where there is no speed limit, and American interstate highways, where there is. (Source: http://www.motorists.org/pressreleases/home/montana-no-speed-limit-safety-paradox/)
Legislating lower speed limits as a method of conserving fuel is public policy that endangers the public while not meaningfully reducing fuel consumption. In order to reduce traffic fatalities, neither the federal government nor state and local governments should impose a maximum limit on highway speeds.