Benefits and costs of the 55 mph speed limit: New estimates and their implications

The national 55 mile-per-hour speed limit was in effect from 1974 to 1987, and over the years many analysts have attempted to measure and compare its costs (enforcement and travel time) and benefits (safety and fuel economy). In 1984 a committee of the National Research Council completed a major study of the speed limit. The following article completes the committee's calculations; summarizes the results in units of money, lives, and travel time; and divides these effects between rural interstates and all other roads. Over a range of plausible dollar values for extra travel time, the cost of saving a life is estimated to be much higher on rural interstates than on other affected roads—and higher than the cost of saving a life by other highway safety measures as well. Hence, proponents of higher speed limits on the rural interstates have a strong case in the debate, which continues in the state legislatures.     

Do speed cameras produce net benefits? Evidence from British Columbia,Canada

Traffic collisions kill about 43,000 Americans a year. Worldwide, road traffic injuries are the leading cause of death by injury and the ninth leading cause of all deaths. Photo Radar speed enforcement has been implemented in the United States and many other industrialized countries, yet its cost‐effectiveness from a societal viewpoint, taking all significant impacts into account, has not been reported. This paper fills this gap, reporting on a Photo Radar traffic safety program introduced in 1996 in British Columbia, Canada, and incorporating the results of rigorous statistical analyses on speed and crash impacts into a comprehensive cost‐benefit analysis from both societal and sponsoring‐agency perspectives. The study reveals that the Rhoto Radar Program cost C$27 million per year in 2001 Canadian dollars (?US$21 million) and generated benefits valued at $142 million per year (?US$109 million), for net societal benefits of C$115 million per year (?US$88 million). It was estimated that the sponsoring agency saved C$38 million (?US$29 million) annually in claim costs. These results are robust to plausible alternate assumptions. Societal net benefits become negative only if the reduction in injuries and fatalities is one standard error below the expected value, or if private travel time is valued at or above C$15 per hour. Agency claim cost savings are greater than program costs under all scenarios tested. These results are likely applicable to jurisdictions in developed countries with similar traffic infrastructure: Greater use of highway photo radar speed enforcement would be good public policy. © 2006 by the Association for Public Policy Analysis and Management     

The tragedy of the political commons: Evidence from U.S. Senate roll call votes on environmental legislation

When the costs of regulation are borne by individuals outside of their political jurisdiction, an elected politician arguably will vote in favor of socially costly regulations because from his/her narrow perspective even small marginal benefits outweigh zero marginal costs. Our empirical analysis of the environmental voting records of U.S. Senators from 1991 to 2002 reveals a pronounced tendency for Senators to vote against (in favor of) environmental bills that impose costs in their (other) states. The straightforward implication is that elected politicians overgraze the regulatory pasture.     

The Evolution and Devolution of Speed Limit Law and the Effect on Fatality Rates

The three most recent decades provide an outstanding opportunity to study the changing federalist landscape concerning the regulation of speed on the nation's highways. Speed limits were the province of the states until the 1970s when, in an effort to save energy, the central government nationalized the maximum speed at 55 miles per hour. The national standard remained until the 1980s, when a partial devolution transferred some power to set speed limits back to the individual states. At that time, states could increase the maximum speed to 65 miles per hour on (at fewest) four‐lane, controlled access highways in low population density areas. Some states elected to loosen the limits within their borders, while others did not, citing concerns of highway safety as paramount. The 1990s saw the complete devolution of speed limit control to the states, when Congress returned to the states unlimited control. States reacted differently in both of the two latter phases, providing a fruitful landscape for comparative analysis of the effects of the devolution of speed limit control. The focus of this research is to examine which states raised the speed limits at the two stages of devolution, and what the subsequent effects were. I examine the issue of highway safety as a consequence of speed limit change, comparing states to elucidate differences to determine effects. Analysis of highway deaths per mile driven indicates that the nationalization of the 55 miles per hour contributed to an initial greater decline in the former than had been the trend, but the long‐term decreasing trend pattern reemerged following the shock of the change in federal speed limit policy. Additionally, the speed limit devolution and resulting raising of speed limits in certain states did not lead to a statistically significant rise in fatalities per miles driven. Automobile safety features and enforcement emerge as important factors in increasing highway safety; speed limits are far less important.     

Legislator Turnout and the Calculus of Voting: The Determinants of Abstention in the U.S. Congress

The belief that turnout and abstention depend on theinteraction of the benefits and costs of voting is oneof the longest held in public choice. The interplaybetween benefits and costs has typically been studiedwithin the context of voter turnout in elections, butthese results are confounded by the fact thatparticipation in such elections is a low-cost, low-benefit activity. Analysis of voting in legislatures,where the potential returns and costs to participantsare greater, is more promising. This paper examines participation on roll calls in theU.S. House of Representatives during the recent 104thCongress (1995–1996). We analyze all contested rollcalls during this two-year period, using a negativebinomial count model that accounts for legislatorheterogeneity, to determine what factors associatedwith such votes induce turnout. Our results suggestthat, while turnout is predictable, its primaryexplanation does not lie with our standard calculationof expected benefits. We find that the ideologicalpolarization of the roll call alternatives is not avery important factor for turnout and, even morestrikingly and contrary to what past analysis hasimplied, the likelihood of any given legislator beingpivotal is completely irrelevant. Rather, what is mostimportant is that a non-trivial number of members ofCongress decide not to vote when contextual factorsforce them to choose between electioneering andlegislating. Consequently, while our results are notsufficient to induce a full-fledged ``paradox ofcongressional voting'' analogous to that of massvoting, they do indicate that participation inCongress depends most heavily on factors beyond adesire to affect the outcome.     

Economic globalization and voter turnout in established democracies

This paper asks whether international economic integration negatively affects electoral turnout. The theoretical model builds on the premise that economic integration constrains the ability of national governments to shape outcomes. Citizens are conscious of such constraints and take them into account when considering the costs and benefits of casting a vote in national elections. The result is a lower inclination to vote under conditions of high economic integration. Consequently, aggregate turnout is lower the more internationally integrated a national economy is. Analysis of aggregate data for parliamentary elections in 23 OECD democracies over the period 1965–2006 robustly supports this hypothesis. The empirical estimates suggest economic globalization as a central cause of the general decline in turnout within established democracies.     

EMS-based Environmental Regimes as Club Goods: Examining Variations in Firm-level Adoption of ISO 14001 and EMAS in U.K., U.S. and Germany

This paper examines variations in firm-level adoption of environmental management systems (EMS) – ISO 14001 and the European Union's Eco-Audit and Management Scheme (EMAS) – in the United Kingdom, Germany and the United States. Drawing on insights from club theory, institutional theory, and stakeholder theory, it argues that despite the fact that these EMS are created by supranational organizations (one regional and one international), firms' perceptions of their costs and benefits are largely determined by domestic factors. In particular, these perceptions are shaped by how EMS are promoted and information about them is disseminated in each country (supply aspects) and how the constellation of stakeholders (suppliers, environmental groups, regulators, general public) support their introduction (demand aspects). The paper concludes that there are numerous ways governments and interested stakeholders can encourage companies to adopt voluntary environmental codes. The key is to find the right mix of incentives for specific national contexts.     

Formal Theory and the Institutions of Governance

Understanding governance in the world's democracies requires study of the political institutions — the chief executives, the bureaucracies, and the legislatures — most involved in national policymaking. There are many approaches to the study of these institutions. This article examines the potential of an approach which is relatively unfamiliar to most students of governance: the development of formal mathematical theories of political institutions. The costs and benefits of this approach are discussed, various types of formal theories are surveyed, and a variety of possible applications to some central problems of governance are described.     

Rental Housing Assistance and Health: Evidence From the Survey of Income and Program Participation

Interest in the health impacts of renter housing assistance has grown in the wake of heated national discussions on health care and social welfare spending. Assistance may improve renters’ health by offering (a) low, fixed housing costs; (b) protection against eviction; and (c) access to better homes and neighborhoods. Using data from the Survey of Income and Program Participation and econometric analysis, I estimate the effect of receiving assistance from the public housing or Section 8 voucher programs on low-income renters’ reported health status and spending. Assisted renters spent less on health care over the year than unassisted low-income renters did, after controlling for other characteristics. This finding suggests that assisted housing leads to health benefits that may reduce low-income renters’ need to purchase health services. Voucher holders’ lower expenditures are influenced by their low, fixed housing costs, but public housing residents’ lower expenditures are not explained by existing theory.     

The benefits and costs of the Section 8 housing subsidy program: A framework and estimates of first‐year effects

This paper provides estimates for a comprehensive set of social benefits and costs associated with the federal Housing Choice Voucher ( Section 8 ) program. The impact categories for which we provide empirical estimates include the value of the voucher to recipients; additional services and public benefits induced by voucher receipt; improvements in children's health, education, and criminal behaviors; the costs of voucher provision; the labor supply impacts on voucher recipients; and community effects. These estimates rest largely on empirical analyses of the effect of voucher receipt on several recipient and taxpayer behaviors and outcomes that occur in the first year of voucher receipt. The analysis distinguishes benefits and costs accruing to program participants, nonparticipants—including taxpayers and property owners—and society as a whole. Our analysis suggests that the program is likely to meet the efficiency standard of positive net social benefits. © 2011 by the Association for Public Policy Analysis and Management.     

Competition in the weapons acquisition process: The case of U.S. warplanes

Consistent with the recent national trend to dismantle or limit the scope of regulatory agencies and controls, the military services are taking increasing advantage of competition to secure low, realistic prices and costs, as well as improved performance and reliability, for weapons and replacement parts. Using the purchase of combat aircraft and related systems as examples, this article assesses the effects of market structure on competition. Although competition can be effective, the unusual incentives flowing from interservice rivalry and the parochial interests of individual legislators often allow contractors to underbid or “buy in” on early development and production contracts and to “get well” on later contracts. Expanding the role of competition within the present institutional framework holds the potential for some improvement in the procurement process. More fundamental change is necessary to alter the role of Congress and eliminate the influence of undesirable rivalry among the services.     

Why do States Grant Asylum?

Recent legislation introduced by European states to limit access to asylum is an attempt to reinforce the State's control of admission to its territory. However, while certain of these states have effectively ceased to permit immigration, none have indicated that asylum should cease to be granted. This paper examines the reasons why States continue to grant asylum and suggests that there are certain conditions which are necessary for granting asylum, in particular, that the benefits to the asylum granting State outweigh any costs.     

Civil society participation in global governance: Insights from climate politics

A rather unique feature of global climate negotiations is that most governments allow representatives of civil society organisations to be part of their national delegation. It remains unclear, however, why states grant such access in the first place. While there are likely to be benefits from formally including civil society, there are also substantial costs stemming from constraints on sovereignty. In light of this tradeoff, this article argues for a ‘contagion’ effect that explains this phenomenon besides domestic determinants. In particular, states, which are more central to the broader network of global governance, are more likely to be informed of and influenced by other states' actions and policies toward civil society. In turn, more central governments are likely to include civil society actors if other governments do so as well. This argument is tested with data on the participation of civil society organisations in national delegations to global climate negotiations between 1995 and 2005. To further uncover the underlying mechanisms, the article also provides an analysis of survey data collected at the United Nations Framework Convention on Climate Change (UNFCCC) negotiations in Durban in 2011.     

Buckle up or slow down? New estimates of offsetting behavior and their implications for automobile safety regulation

This study provides a detailed examination of the determinants of motor vehicle fatalities and offers a new assessment of the effects of automobile safety regulation. An empirical analysis is difficult because drivers are unlikely to remain passive in the face of changes in their safety environment. This offsetting behavior hypothesis is cast in a broad framework that brings together elements from the economics and cognition literatures. This approach allows us to highlight key maintained assumptions in previous analyses and to consider how econometric evidence can inform discussions about highway safety policy. The econometric estimates reveal that, while imprecisely estimated, offsetting behavior is quantitatively important and attenuates the effects of safety regulation on total motor vehicle fatalities. Cognitive elements, the relative costs of repairs, and the functional form of the estimating equation are shown to play prominent roles in the analysis of safety regulation. Our estimates imply that current highway policy initiatives—mandating restraint systems and relaxing restrictions on the maximum speed limit—are likely to have only a modest net effect on reducing motor vehicle fatalities.     

Transforming top‐down agricultural extension to a participatory system: a study of costs and prospective benefits in Egypt

This article challenges some previous assessments of agricultural extension relying on simple measures of costs per farmer trained. Taking the case of Egypt, five pilot projects that aim to transform the existing agricultural extension system to a participatory system are analysed as regards their cost‐effectiveness and prospective cost–benefits. It is shown that the intensity and likely impact of participatory approaches among the different projects vary. Hence, it is insufficient to judge extension programmes by their cost‐effectiveness alone. In the case of cotton, for example, the costs per farmer trained are considerably lower than in horticultural crops but there are large differences in prospective benefits which would make investment in participatory extension in the latter more promising. The article calls for a more careful analysis of the costs of extension programmes in agricultural development and identifies four major cost categories, namely base costs, start‐up costs, recurrent and farmers' costs. The article also submits that in the context of the debate on privatization of agricultural extension there is a role to be played for the public sector in agriculture. The success of participatory approaches to extension will depend on the quality of services provided in connection with farmer training programmes. Copyright © 2002 John Wiley & Sons, Ltd.     

Transaction costs and inter‐jurisdictional cooperation: an application to land use collaboration

• The costs and benefits of inter‐jurisdictional cooperation and how these impede strategic alliances among jurisdictions is an issue of growing importance worldwide. The reason is the potential cost savings, efficiency increase and economic development benefits that can be realized through cooperation. The literature has increasingly mentioned transaction costs as obstacles that mitigate cooperation and as a key component of cooperation costs, which must be outweighed by cooperation benefits in order for communities to perceive advantageous strategic alliances. However, a framework is lacking in the literature for evaluating the implications of transaction costs for inter‐jurisdictional cooperation. This paper develops a framework for evaluating the nature and dynamics of transaction costs and their implications for inter‐jurisdictional cooperation, with an application to land use. A simple cost function model is used to explain the costs and challenges associated with managing coordinated, cooperative or consolidated relationships, and the dynamics of such costs. The analysis highlights the importance of such things as degree of complexity, inter‐party diversity and the relative sizes of collaborating partners. An application to land use cooperation in Michigan suggests that policies to eliminate transaction costs could help reduce the barriers to cooperation of various types.

Copyright © 2010 John Wiley & Sons, Ltd.     

Discounting the benefits and costs of environmental regulations

This paper develops a two-stage procedure for discounting the benefits and costs of environmental regulations that is a variant of the shadow price of capital approach. Under this approach, the capital costs imposed by a regulation are annualized using the marginal rate of return on capital and then both benefits and costs are discounted using the social rate of time preference. This approach yields results that differ significantly from those of conventional discounting when benefits occur with a substantial lag or when benefits are long term.     

Cognitive Biases in Governing: Technology Preferences in Election Administration

Cognitive biases are heuristics that shape individual preferences and decisions in a way that is at odds with means‐end rationality. The effects of cognitive biases on governing are underexplored. The authors study how election administrators’ cognitive biases shape their preferences for e‐voting technology using data from a national survey of local election officials. The technology acceptance model, which employs a rational, means‐end perspective, suggests that the perceived benefits of e‐voting machines explain their popularity. But findings indicate that cognitive biases also play a role, even after controlling for the perceived benefits and costs of the technology. The findings point to a novel cognitive bias that is of particular interest to research on e‐government: officials who have a general faith in technology are attracted to more innovative alternatives. The authors also find that local election officials who prefer e‐voting machines do so in part because they overvalue the technology they already possess and because they are overly confident in their own judgment.     

THE WELFARE COSTS OF SUPPLY RESTRICTIONS IN THE GENERAL PRACTICE LABOUR MARKET

Abstract: This paper examines policy arguments for further restricting supply to the Australian General Practice profession by immigration and medical school policies. It uses economic analysis to assess the costs and benefits of supply restrictions. The effects of Medicare and GP income-targeting on policy design are analysed. Restrictions are shown to impose net costs on the community as a whole and on government. Even with Medicare subsidies, the inefficiency costs of the current health system are minimised with liberal policies for accepting foreign- trained GPs.     

Optimal voting rules under uncertainty

The theory of ‘constitutional’ choice of voting rules developed by Buchanan and Tullock is an extended to an explicit decision-theoretic form. Voters in the ‘constitutional’ position choose what they believe will be their optimal share or majority rule for making social decisions, by maximizing their individual expected utility from the anticipated social decisions, under conditions of uncertainty. The rule that maximizes expected social benefits depends upon (1) the expected distribution and intensity of preferences on future issues, and (2) the decisionmaking procedures and costs. ‘Decisionmaking’ and ‘external’ costs are shown to be interrelated. Following this analysis, failure to pass laws imposes ‘external’ costs in the same way that passing them does, so that the optimal majority may be lower when desirable laws are viewed as changing over time. Decisionmaking costs depend upon the way in which voters are persuaded to support or oppose bills, upon the distribution of preferences on bills, and on vote-trading possibilities. If vote-trading is almost costless, a wide range of decision rules has nearly equal social benefits. Finally, the model is used to discuss optimal voting rules for several decisionmaking bodies.