Road speed limit matters – Are politicians doing the right thing?

Public Authorities are responsible for setting speed limits on roads. It is obvious that the modification of speed limits affect travel time. Also, there are many academic studies highlighting the relationship between vehicle speed and other particular isolated social costs, such as speed and accidents, speed and pollution or speed and fuel consumption. However, there are very few comprehensive studies on the subject of optimum speed limits. Furthermore, when Public Authorities modify speed limits usually they justify the measure to achieve a particular goal. The aim of this paper is to develop a comprehensive methodology that relies on cost-benefit analyses to determine the optimum speed limit for a particular road. The methodology is then applied to two recent case studies in Spain. In the first one, the Authorities decreased speed limits on national highways from 120 to 110 km per hour to save fuel. In the second case, the Authorities also reduced speed limits on the M − 30 ring road from 90 to 70 km per hour on specific days to reduce pollution. It seems that the Authorities might not always perform a technical analysis of these measures before implementing these policies.