Fines, Non-Payment, and Revenues: Evidence from Speeding Tickets

39 Pages Posted: 22 Nov 2022 Last revised: 16 Jun 2023

See all articles by Christian Traxler

Christian Traxler

Hertie School; CESifo (Center for Economic Studies and Ifo Institute)

Libor Dusek

Charles University, Faculty of Law; University of Economics, Prague

Date Written: November 19, 2022

Abstract

We estimate the effect of the level of fines on payment compliance and revenues collected from speeding tickets. Exploiting discontinuous increases in fines at speed cutoffs and reform induced variation in these discontinuities, we implement two complementary regression discontinuity designs. The results consistently document small payment responses: a 10 percent increase in the fine (i.e. the payment obligation) induces a 1.2 percentage point decline in timely payments. The implied revenue elasticity is about 0.9. Expressed in absolute terms, a one dollar increase in the fine translates into a roughly 60 cent increase in payments collected.

Keywords: Fines; Timely Payment; Speeding Tickets; Regression Discontinuity Design

JEL Classification: H27; H26; K42

Suggested Citation

Traxler, Christian and Dusek, Libor, Fines, Non-Payment, and Revenues: Evidence from Speeding Tickets (November 19, 2022). Available at SSRN: https://ssrn.com/abstract=4281384 or http://dx.doi.org/10.2139/ssrn.4281384

Christian Traxler (Contact Author)

Hertie School ( email )

Friedrichstrasse 180
Quartier 110
Berlin, 10117
Germany

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschingerstr. 5
Munich, DE-81679
Germany

Libor Dusek

Charles University, Faculty of Law ( email )

nam. Curieovych 7
Prague 1, 11640
Czech Republic

University of Economics, Prague ( email )

nam. W.Churchilla 4
Prague 3, 130 67
Czech Republic

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