Abstract
Setting appropriate speeds on roadways requires balancing the economic and social benefits of higher vehicle speeds on one hand, against the greater safety, environmental, and human activity costs of fast-moving traffic on the other. While drivers and commercial shippers typically favor faster limits, those living, walking, biking, or playing in proximity to roads often want slower limits. The most common method for setting speed limits, however, leaves it to drivers to collectively decide how fast is too fast. According to the U.S. Federal Highway Administration (FHWA), most places in North America set speed limits using the “85th-percentile rule.” This long-established standard calls for observing the speeds of free-flowing traffic on a roadway without posted speed limits, and then setting the limit at a 5 mph increment above or below the speed at which 85% of vehicles travel. So, for example, if 85% of drivers on a particular road are observed to travel at 43 mph or less, the speed limit would be set at 45 mph.
