The unintended consequences of high oil prices

I think this story in the Guardian is great. Higher petrol prices lead to slower driving and less road deaths. Interestingly the effect seems to come from the effect high petrol prices have on discouraging price sensitive drivers who also happen to be the most accident prone (since this category includes teenagers and the elderly).  It does seem to strengthen the case for Pigovian taxes on petrol since the effect of the speed at which you drive has an additional negative but unpriced effect on other drivers in the form of increasing the likelihood of accidents and fatalities. Of course driving too slowly also imposes a negative externality in the form of congestion . . .

Comments

[cameron]

"Of course driving too slowly also imposes a negative externality in the form of congestion"

Actually this might be false

"There's a thought that if you could just make drivers approach at a slower, steadier pace, it would be quicker to get out of that congestion." -Tom Vanderbil author of Traffic: Why We Drive the Way We Do (and What It Says About Us)

This is from an interview on Marketplace

http://marketplace.publicradio.org/display/web/2008/08/26/traffic_q/

[Dipper]

I believe (anecdotally) that 35 mph is the speed with the highest throughput. This is because the cars bunch up so speed x distance is a maximum.

I tried modelling this on a spreadsheet once. It comes down to a function for acceleration for each car depending on the speed of the car and distance to the car in front. I had a column of cars moving at a constant speed, then let the front cars go. After a few iterations the fourth rank were going backwards at 100mph. Some fine tuning required, but I think the principle was proved.