Speed limit laws in America: economics, politics and geography

The regulation of speed limits in the US had been centralized at the federal level since 1974, until decisions were devolved to the states in 1995. However, the centralization debate has reemerged in recent years. Here, we conduct the first econometric analysis of the determinants of speed limit laws. By using economic, geographic and political variables, our results suggest that geography -which affects private mobility needs and preferences- is the main factor influencing speed limit laws. We also highlight the role played by political ideology, with Republican constituencies being associated with higher speed limits. Furthermore, we identify the presence of regional and time dependence effects. By contrast, poor road safety outcomes do not impede the enactment of high speed limits. Overall, we present the first evidence of the role played by geographical, ideological and regional characteristics, which provide us with a better understanding of the formulation of speed limit policies.