HW 3 Problem 3 Data Distance (miles) Average speed (mph) # Vehicles per year % Leisure vehicles # Passengers per year Avg hrly wage ($) Average tax rate (percent) Average hourly wage after tax # Vehicle miles per year Lowering Speed Limit Reduced vehicle crashes Reduced fatalities decrease in operating cost/mile Assumptions Value of time for leisure traveller/ hr Value of statistical life ($) Cost of an accident, excluding the value of lost lives (as fraction of VSL) Before After 30 30 74 56 2,000,000 45 2,200,000 20.0 Assume that this is before tax 22 15.6 60,000,000 40 0.4 0.005 7.8 Table 17.5 11,000,000 Table 17.1 0.015 Based on Table 17.2, assuming that most crashes are property damage only (PDO) or involve moderate injuries. . In an example for use of the Value of a Statistical Life in BCA we calculated the benefits of increasing the speed limit for a highway (Week 8). To get additional practice and a better understanding of the use of VSL, this exercise asks you to calculate the benefits of reducing the speed limit. Suppose the area around a 30-mile stretch of highway has become more urbanized and traffic has increased, so city planners are considering lowering the speed limit on the highway as it passes the town from 65 mph to 50 mph. The relevant information is available in the attached Excel spreadsheet. Use the worked example from week 8 as a guide to answer the following questions. . Calculate additional travel time costs by calculating average travel time before and after, then calculating the difference. Then calculate total time added. 2 pts . Calculate costs as the value of time added to leisure and business travelers. 2 pts Calculate benefits as avoided operating, fatal crash, and non-fatal crash costs. 2 pts . Calculate NSB. Should the speed limit be lowered? 2 pts