Traffic safety: speed limits, strict liability and a km tax

Eef Delhaye ()
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Eef Delhaye: K.U.Leuven-Center for Economic Studies

Energy, Transport and Environment Working Papers Series from KU Leuven, Department of Economics - Research Group Energy, Transport and Environment

Abstract: Policy makers can improve traffic safety by the use of different instruments. These instruments include regulation (e.g. speed limits, vehicle standards, etc.), enforcement of regulation, liability rules, physical measures (e.g. roundabouts, speed humps, etc.), economic instruments (pricing of transport, insurance pricing), education and sensitisation. In this paper we focus on two specific determinants of accidents: speed and the number of kilometres people drive. If there is no government intervention, people do not take into account the full cost of their driving and they will drive too fast and too much. In our setting, the government can use three instruments to influence the behaviour of people: speed limits, strict liability and a kilometre tax. We set up a theoretical model of traffic accidents to analyse the choice of the speed level and the number of kilometres under the different instruments and determine the optimal combinations. Given our assumptions we never reach the social optimum. To illustrate our results we discuss a numerical example.

Keywords: transport; law and economic; liability; regulation; accidents (search for similar items in EconPapers)
Pages: 44 pages
Date: 2004-08
New Economics Papers: this item is included in nep-law
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ete:etewps:ete0407

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