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Abstract

In reviewing the US debate on speed limits, we illustrate how a different valuation of the trade-off between private mobility needs and safety concerns can shape transport policy. The decentralisation debate and the speed limit in each state, obey the social preferences and valuation given to this trade-off, which in turn are largely influenced by geography. It is consistent with evidence that higher speed limits are found in states with greater mobility needs, even though their fatality rates are among the highest. We illustrate the inefficiency of centralisation when regulating aspects affected by diverse and heterogeneous social preferences across regions.

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