More Tickets, Fewer Accidents: How Cash-Strapped Towns Make for Safer Roads
Michael D Makowsky
Clemson University - John E. Walker Department of Economics
George Mason University - Buchanan Center Political Economy; CESifo (Center for Economic Studies and Ifo Institute); Harvard University - Edmond J. Safra Center for Ethics
August 29, 2010
Traffic accidents are one of the leading causes of injury and death in the U.S. The role of traffic law enforcement in the reduction of accidents has been studied by relatively few papers and with mixed results that may be due to a simultaneity problem. Traffic law enforcement may reduce accidents, but police are also likely to be stricter in accident-prone areas. We use municipal budgetary shortfalls as an instrumental variable to identify the effect of traffic citations on traffic safety and show that budgetary shortfalls lead to more frequent issuance of tickets to drivers. Using a panel of municipalities in Massachusetts, we show that increases in the number of tickets written reduce motor vehicle accidents and accident related injuries. The findings show that failure to control for endogeneity results in a significant underestimation of the positive impact of law enforcement on traffic safety.
Number of Pages in PDF File: 40
Keywords: traffic accidents, safety, law enforcement, simultaneity
JEL Classification: K32. K42, H71, C33
Date posted: August 19, 2008 ; Last revised: November 5, 2013
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