The economic cost of a 130 kph speed limit in Germany: Comment

Sieg, Gernot

Zusammenfassung

Gössling et al. (2023) claim to calculate the welfare effect of a 130 kph speed limit in Germany. By ignoring tax revenues from gasoline and diesel, they overestimate the welfare gain by about 378 million Euros. A speed limit raises travel times. Gössling et al. (2023) calculate travel time increases with a simplistic approach that underestimates the costs with a magnitude of their complete (tax adjusted) welfare effect. A speed limit induces some traffic to switch mode or not to travel at all. The reduced costs of less car travel are decisive for their calculation, but the losses of consumer rent associated with reduced travel are ignored. Gössling et al. (2023) do not calculate a value that is related to the welfare changes of a highway speed limit of 130 kph for Germany.