Abstract
Previous research has produced mixed results for a hypothesis that drivers reduce speeds to conserve gasoline when gasoline prices are high. An analysis that builds on 2012 research by Hendrik Wolff is replicated with an hourly data set of highway speeds from Washington State. A decline in speeds due to increasing gasoline prices is modest but statistically significant. Specifically, a $1/gallon increase in gas prices reduces the average speed by 0.27 mph and changes the average highway speed from 70.82 to 70.55 mph. The change could translate to substantial gas expenditure savings—on the order of $1 billion annually—if similar reductions were seen on all U.S. highways. Study results indicate that in terms of heterogeneity, the fastest drivers do not reduce speeds proportionately; such behavior could undermine the safety objective of a gasoline tax. The speed changes are caused mainly by the gasoline price that drivers pay at the pump. The intense public media attention given to gas prices has relatively little effect on speeding behavior.
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