No Need for Speed: Fuel Prices, Driving Speeds, and the Revealed Value of Time on the German Autobahn

Thomas Hagedorn, Till Kösters, Jan Wessel and Sebastian Specht
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Thomas Hagedorn: Institute of Transport Economics, Muenster

No 39, Working Papers from Institute of Transport Economics, University of Muenster

Abstract: We estimate the relationship between fuel prices and driving speeds on the German Autobahn. The speed price elasticities are higher on sections without a speed limit (-0.047) than on those with a limit (-0.033), thus underlining the distortionary effect of speed limits on previously estimated elasticities. We also find higher elasticities when drivers are alone on the road, for high prices, and slower drivers. Based on the undistorted speed price elasticities, we estimate the short-run fuel demand elasticity and the revealed value of time (20.71 Euro/h; 83% of gross wage), hence providing valuable input for policymakers and infrastructure planning.

Keywords: fuel prices; speed price elasticity; no speed limit; short-run fuel demand elasticity; value of time; German Autobahn (search for similar items in EconPapers)
JEL-codes: Q41 R41 R48 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2023-11
New Economics Papers: this item is included in nep-ene, nep-tre and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:mut:wpaper:39

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