Resource Allocation in Public Policy: The Effects of the 65-MPH Speed Limit

Charles Lave and Patrick Elias

Economic Inquiry, 1997, vol. 35, issue 3, 614-20

Abstract: In 1987, the U.S. government allowed states to raise speed limits to sixty-five miles per hour on some highways. The authors evaluate the consequences using a resource allocation perspective: the chance to drive faster reallocates traffic from side roads to the safer interstate highways, and a higher speed limit permits highway patrols to shift manpower from speed enforcement to other safety activities. This perspective implied that they should measure the effect of a speed limit by its systemwide rather than its local effects. The authors do so and find that the fatality rate dropped by 3.4-5.1 percent following the speed limit increase. Copyright 1997 by Oxford University Press.

Date: 1997
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