Value of Time: Speeding Behavior and Gasoline Prices

Hendrik Wolff ()

No 6788, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Do drivers reduce speeds when gasoline prices are high? Previous research investigating this energy conservation hypothesis produced mixed results. We take a fresh look at the data and estimate a significant negative relationship between speeding and gasoline prices. This presents a new methodology of deriving the 'Value of Time' (VOT) based on the intensive margin (previous VOT studies compare across the extensive margin) which has important advantages to circumvent potential omitted variable problems. While our VOT is 50% of the gross wage rate, we show that previous stated preference estimates are likely downward, whereas previous revealed preference estimates are systematically upward biased. We discuss implications, as VOT today is a key parameter in economics and policy.

Keywords: gasoline price; speeding; value of time (search for similar items in EconPapers)
JEL-codes: D70 J17 K32 Q26 R41 (search for similar items in EconPapers)
Pages: 55 pages
Date: 2012-08
New Economics Papers: this item is included in nep-ene and nep-tre
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published - published in: Journal of Environmental Economics and Management, 2014, 67(1), 71-88.

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