Speed limit on the German Autobahn

Comment by Gernot Sieg on the study by Gössling et. al. (2023) on the speed limit on German highways

Gössling et al. (2023) claim to calculate the welfare effect of a speed limit of 130 km/h in Germany. Since they do not consider tax revenues from gasoline and diesel, they overestimate the welfare gain by about 378 million euros. A speed limit increases travel times. Gössling et al. (2023) calculate travel time increases using a simplified approach that underestimates costs by an order of magnitude equal to their full (tax-adjusted) welfare effect. A speed limit induces some traffic to switch to another mode or not to travel at all. The reduced costs of driving less are crucial to their calculation, but the losses in consumer surplus associated with reduced traffic are ignored. Gössling et al. (2023) do not calculate a value associated with the welfare changes of a 130 km/h speed limit on highways for Germany.

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