This little bit of reading sheds some light on the subject:
http://www.wam.umd.edu/~greghess/sizematters.pdf
You have to also consider the unsprung weight for your vehicle, if the 18"s weigh heaps more than your 16"s then they will be heaps slower. The gearing of your car is also affected by the diameter which is a combination of the overall wheel/tyre combination.
Interestingly in this article they say that the 15"s are ultimately faster but they were able to get more consistent times from the 16"s.
Now this is for a Mk3 vehicle which is different to a Mk4 but the same principles should apply.
Cheers,
Nath
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