Are Traffic Tickets Countercyclical?

Federal Reserve Bank of St. Louis Working Paper No. 2006-048A

22 Pages Posted: 9 Aug 2006  

Thomas A. Garrett

Federal Reserve Bank of St. Louis - Research Division

Gary Wagner

University of Arkansas at Little Rock

Date Written: August 2006

Abstract

There is anecdotal evidence that local governments use traffic tickets to generate revenue. Using panel data for North Carolina counties, we examine whether changes in local government revenue influence the number of traffic tickets issued. We find strong evidence of an asymmetric response by local governments. Specifically, positive changes in revenue have no effect on traffic tickets, but negative revenue changes increase the number of traffic tickets issued. A one percentage point decrease in revenue yields a 0.38 percentage point increase in traffic tickets. We calculate that traffic ticket revenue supplements a low percentage of local revenue losses.

Keywords: traffic tickets, revenue smoothing, local governments

JEL Classification: H72, D72

Suggested Citation

Garrett, Thomas A. and Wagner, Gary, Are Traffic Tickets Countercyclical? (August 2006). Federal Reserve Bank of St. Louis Working Paper No. 2006-048A. Available at SSRN: https://ssrn.com/abstract=923158 or http://dx.doi.org/10.2139/ssrn.923158

Thomas A. Garrett (Contact Author)

Federal Reserve Bank of St. Louis - Research Division ( email )

411 Locust St
Saint Louis, MO 63011
United States

Gary Wagner

University of Arkansas at Little Rock ( email )

Little Rock, AK 72201
United States

Paper statistics

Downloads
257
Rank
96,256
Abstract Views
2,832