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

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  • Christian Traxler
  • Libor Dušek

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% 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 within 15 days.

Suggested Citation

  • Christian Traxler & Libor Dušek, 2023. "Fines, Non-Payment, and Revenues: Evidence from Speeding Tickets," Berlin School of Economics Discussion Papers 0023, Berlin School of Economics.
    • Handle: RePEc:bdp:dpaper:0023
    DOI: 10.48462/opus4-5046
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    Cited by:

    1. Libor Dušek & Christian Traxler, 2024. "Swiftness and Delay of Punishment," Berlin School of Economics Discussion Papers 0032, Berlin School of Economics.

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    More about this item

    Keywords

    Fines; Timely Payment; Speeding Tickets; Regression Discontinuity Design;
    All these keywords.

    JEL classification:

    • H27 - Public Economics - - Taxation, Subsidies, and Revenue - - - Other Sources of Revenue
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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