Uniquely amongst industrialized countries worldwide, Germany does not impose a general speed limit on highways. This is different in the Netherlands, where a limit of 130km/h is implemented. The direct border between the two countries provides an opportunity to construct a natural experiment and analyze the social impact of a general speed limit of 130 km/h for passenger cars on German highways. I quantify the social welfare impacts from travel time, accident victims, fuel consumption and emissions for two highway sections in the federal state of North Rhine-Westphalia, Germany. The results are obtained by a descriptive comparison of micro data on travel speeds and accidents, collected on the two designated cross-border highways. In the central case, I conclude that on both highways a speed limit would be beneficial from the social and private perspective. The impacts found on the two highways differ in magnitude, but the qualitative decisions are identical and sufficiently robust to their core assumptions.
Speed Limit Highway Germany Cost-Benefit Analysis Transport Economics