Wednesday, February 21, 2007

Economics of Speed Traps

Perhaps you know of places or town that have a reputation of being "speed traps". There is one town in Texas that would save everybody time if the cops would just take VISA on the spot. Well economists are fond of determining if something causes towns to rigidly enforce traffic laws. The following is an except from a paper (HT Tyler Cowen)

Speeding tickets are not only determined by the speed of the offender, but by incentives faced by police officers and their vote maximizing principals. Our model predicts that police officers issue higher fines when drivers have a higher opportunity cost of contesting a ticket, and when drivers do not reside in the community where they are stopped. The model also predicts that local officers are more likely to issue a ticket when legal limits prevent the local government from increasing revenues though other instruments such as property taxes. We find support for the hypotheses. The farther the residence of a driver from the municipality where the ticket could be contested, the higher is the likelihood of a speeding fine, and the larger the amount of the fine. The probability of a fine issued by a local officer is higher in towns when constraints on increasing property taxes are binding, the property tax base is lower, and the town is more dependent on revenues from tourism. For state troopers, who are not employed by the local, but the state government, we do not find evidence that the likelihood traffic fines varies with town characteristics. Finally, personal characteristics, such as gender and race are among the determinants of traffic fines.

That is from Thomas Stratmann and Michael Makowsky, both at George Mason. Here is
the paper.

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