Higher speed limits

Today, I received my copy of The Nation's Health, a newspaper put out by the American Public Health Association.  In one section of the "paper", articles from the American Journal of Public Health are highlighted.  A recent article focused on the changes in speed limits that date back to 1995.  In that year, the federal regulations that had kept urban speed limits at 55 MPH and rural  speed limits at 65 MPH were lifted and states were allowed to set their own rates.  There are some states with rural area speed limits that are now 70 or 75 MPH.

Why is this of interest and why was it studied?  The article in The Nation's Health suggests that 12,500 deaths and 36,600 injuries were associated with the higher speed limits.  The deaths alone have been assigned a dollar value of $12 billion.  That translates into just under $1 million per death.

This brings us to the economic questions of the day.

• What is a life worth? 
• What does accepting $12 billion in lost life for faster speeds mean about our society.  

The value of life is often estimated at more than $1 million.  So, it is interesting that the researchers used such a conservative figure.  This is based in part on lifetime earnings and in part on estimates of how society has made tradeoffs between money and life in the past.  Interestingly, while the estimates are often over $1 million, the range of estimates is wide.

As for the second question, to the degree that we understand the $12 billion loss and agree that that is a reasonable valuation of lives lost, it means that we accept this in order to gain something from getting  where we need to go more quickly.  The study did not present an estimate of the value of getting places more quickly.  It is not clear that most people understand what $12 billion means or think that their own behavior will affect this.  The assumption is that society feels that the value of faster transportation outweighs the $12 billion loss (as well as the higher gasoline consumption associated with higher speeds).  It is quite possible that this is a rational choice at a societal level--even though for each family with a member who dies as a result of faster speeds it is an awful experience.

The researchers or the original article stated that "policy decisions that appear harmless can have long-term repercussions" and recommended reducing speed limits again.  I am not convinced that this policy was expected to be harmless in the first place or that society as a whole is not willing to accept the tradeoffs.  We cannot reduce the risk to zero.  We must decide what risk at what cost in return for what convenience is appropriate.