Will driving at 80 mph help the economy? Statistics say… probably not

Last week, the Transport Secretary Phillip Hammond announced plans to raise the speed limits on motorways from 70 mph to 80 mph. This, he claimed, would:

“generate economic benefits of hundreds of millions of pounds through shorter journey times.”

Never mind the debates about safety and the environment, let’s look at this one argument. So, does a shorter journey equal a more economic journey? The problem is that cars need more fuel to travel faster, and so the faster you go, the worse your fuel efficiency is. Statistics that go right up to 80 mph are hard to find for some reason – the big US government study for example only went up to 75 mph – but according to the calculator at MPG for speed (better sources always appreciated), driving at 80 mph uses about 15% more fuel per mile than driving at 70 mph.

So, lets do some maths! For the sake of simplicity, we’ll assume every single journey on the motorways is work-related. The actual figures will be lower, especially on weekends and holidays.

At 70 mph, it takes 51 seconds to drive 1 mile. In this time, a car with a claimed “highway” fuel efficiency of 40 miles per gallon (roughly as efficient as a modern hatchback like a Ford Fiesta) will use about 0.11 litres of petrol. At the current average pump price, that’s 15 pence of petrol.

At 80 mph, you cover that same mile in 45 seconds, saving you 6 seconds. On the other hand, your car is now 15% less efficient. According to the calculator, your 40 MPG car is now doing just 28.8 MPG, using around 0.13 litres of petrol to cover that mile, so the fuel to travel that distance cost you about 18 pence.

Spending 3 pence to save 6 seconds is equivalent to spending £18 to save 1 hour. The average median wage in the UK is far lower than £18 an hour (currently, it’s £12.50 per hour for full-time workers (PDF))* – in other words, if you drove at the speed limit to get to/from work, the money you’d be spending on petrol would mean most people would actually lose out (people who car-share would be in a better position, but few people car-share to work).

All the extra pay taken home by workers would simply end up going straight to the petrol companies – and when the government is trying to increase consumer spending, that’s the last thing the economy needs.

(Oops, forgot to mention that this post bears a debt of inspiration to this xkcd comic.)

* Thanks to Lukeablancas in the comments for pointing out that I’ve gone for the median wage. The median wage is good for working out what this means for the average person, since it’s unaffected by extremes, but if we’re looking at the country as a whole, the mean wage might be better – this will take high-earners like company bosses into account, as well as people who work in short but intense shifts, like some freelancers. In 2010, the mean wage for men was £16.00 per hour and for women it was £12.92 per hour (annoyingly the government hasn’t released the combined figures for men and women, but assuming there are roughly equal numbers of both in work the average wage overall is £14.46 per hour). Either way, on average people will end up losing out.

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  1. #1 by Tim Beadle on Monday, 3rd October 2011 - 15:10 UTC

    “All the extra pay taken home by workers would simply end up going straight to the petrol companies – and when the government is trying to increase consumer spending, that’s the last thing the economy needs.”

    Except most of what you pay at the pump goes to the Government as fuel duty. I suspect it’s Hammond’s plan to increase taxation by encouraging more fuel use. Good job the earth’s got unlimited supplies of oil, eh?! Erm…

    Has Hammond factored in that, according to DfT figures, each RTC fatality is estimated to cost £5 million? I suspect not. He’s hoping for the best and completely ignoring the worst-case scenario.

    • #2 by atomicspin on Monday, 3rd October 2011 - 15:37 UTC

      Great points, although that said I can just see some poor statistician in the Department for Transport being made to make sure that each extra road traffic death is a net gain for the economy.

  2. #3 by Gordon on Monday, 3rd October 2011 - 16:44 UTC

    The maths here is so flawed that my laptop’s processor has just thrown a BSOD in protest.

    • #4 by atomicspin on Monday, 3rd October 2011 - 22:56 UTC

      I’d be happy to correct any mistakes in my maths, but you’d have to explain what they actually are! As far as I can see, comparing the cost of driving at 80 mph to the benefits of it is completely fair, and there’s nothing wrong with doing it in time intervals either (in fact, since I couldn’t find any data about average motorway journey length, this seems like the best way of doing it). Indeed, cost-benefit is pretty much the bread-and-butter of economics – I’m not even the first person to think of applying it to buying petrol.

  3. #5 by Martin_Lack on Monday, 3rd October 2011 - 16:57 UTC

    I am glad someone has decided to write about this utterly mad, and short-sighted announcement.

    For months now, I have been telling anyone who would listen to me (offline) that the government was likely to reduce the speed limit in order to force people to save fuel. But I’m not angry about this decision because it makes me look silly. I’m angry about this decision because it is silly.

    I used to be one of those people that habitually exceeded 80mph, but not any more. It doesn’t make sense. Moderating your spend saves you masses of money. If people could see the money flying out the window as they drive along, I bet they would slow down then.

    In any case, exactly what businesses will save money from shorter journey times? Many vehicles (that should not be on the road) are speed-limited (to save money) so they aren’t going to get anywhere any faster. And, on our over-crowded little island, this change will not magic the traffic jams away…

    Anyone who continues to drive fast, clearly has money to burn.

    In fact, “Money to burn? would make a good name for the Consultation Document…

  4. #6 by Lukeablancas on Tuesday, 4th October 2011 - 9:36 UTC

    Interesting post, would be good to see how this plays out. I trying not to do this but I just can’t help myself – you have discussed the median hourly wage in your post, not the average. Which is arguably a better way to discuss it anyway… *hangs head in pedantic shame*

    • #7 by atomicspin on Tuesday, 4th October 2011 - 16:48 UTC

      Ah, you’re right! I didn’t catch that one. You’re right, mean wage would be a better way of looking at it’s effect on the country as a whole, though I suppose that for looking at it’s effect on individuals the median would work better (most of the population live below or around median wage, while mean wage would be quite strongly affected by extremely high earners (company bosses, freelance/agency workers who do relatively short shifts of intense work, etc.)). Annoyingly though, the latest government data gives the mean wages for men and women separately, but not together.

  5. #8 by priad on Tuesday, 4th October 2011 - 13:50 UTC

    Very interesting debate :) I would like to add a few things to the discussion.

    What if you need to get to a job quite a few miles away and you are late, thus speeding prevents you from losing your job and all income from it. Also If you have a job offer a good distance from your home, speeding might make the difference between you being able to do it or not. Also, Ford Fiiesta’s are “town cars”, saloon cars such as BMW’s (very popular), Merc’s, Saabs, etc are designed to do these speeds and often have 6 or sometime 7 gears so they are more efficient on the motorway. “motorway” car, although not so efficient in town driving are the choice of traveling reps for this reason.

    Anyway, my point was that a large proportion of cars you see on the motorway do 80mph. regardless of the cost a large proportion of people believe that is is ok to do these speeds. Why criminalise these taxpaying citizens? Isn’t it their choice how they spend there money? If you want to go down the down the environmental route then I will say this: a few MPH means nothing, what we need is a technological change to zero emissions, 10 MPG reduction or increase will not save or destroy the world (especially with china in the fray)

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