Study: When local revenue falls, traffic tickets go up
Embargoed Release: January 09, 2009
Contact: Kevin Stacey / 773-834-0386 / kstacey@press.uchicago.edu
Study: When local revenue falls, traffic tickets go up
Got a lead foot? Hold on to your wallet.
A new study to be published in next month’s Journal of Law and Economics
finds statistical evidence that local governments use traffic citations
to make up for revenue shortfalls. So as the economy tanks, motorists
may be more likely to see red and blue in the rearview.
Study authors Thomas Garrett, assistant vice president at the Federal
Reserve Bank of St. Louis, and Gary Wagner from the University of
Arkansas Little Rock, examined 14 years of revenue and traffic citation
data from counties in North Carolina. They found that the number of
traffic citations issued goes up the year following a revenue drop.
“Specifically, a one percentage point decrease in last year’s local
government revenue results in roughly a 0.32 percentage point increase
in the number of traffic tickets in the following year,” Garrett and
Wagner write.
That number may sound small, but it’s a statistically significant
correlation, the authors say.
The study controlled for demographic and economic differences in the
sample, which contained data from 96 North Carolina counties collected
from 1990 to 2003.
The finding adds credence to something many motorists have long
suspected: Safety isn’t the only motive in traffic enforcement efforts.
Since many municipalities retain the money generated by traffic fines,
perhaps traffic enforcement also acts as a bit of a fundraiser.
“There is ample anecdotal evidence that local governments use traffic
tickets as a means of generating revenue.,” Garrett and Wagner write.
“Our paper provides the first empirical evidence to support this view..”
And don’t expect to be able to throttle up when the economy recovers.
The study found no significant drop in tickets when revenues increased.
Garrett, Thomas A., Gary A. Wagner, “Red Ink in the Rearview Mirror:
Local Fiscal Conditions and the Issuance of Traffic Tickets,” Journal of
Law and Economics, 52:1, Feb. 2009
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Study:
PDF 30 pages:
http://research.stlouisfed.org/wp/2006/2006-048.pdf
Red Ink in the Rearview Mirror:
Local Fiscal Conditions and the Issuance of Traffic Tickets
Thomas A. Garrett and Gary A. Wagner
Abstract
Municipalities have revenue motives for enforcing traffic laws in
addition to public safety motives because many traffic offenses are
punished via fines and the issuing municipality often retains the
revenue. Anecdotal evidence supports this revenue motive. We empirically test this revenue motive using a panel of annual data for North Carolina counties from 1990 to 2003. We find that significantly more tickets are issued in the year following a decline in revenue, but the issuance of traffic tickets does not decline in years following revenue increases. Elasticity estimates reveal that a ten percent decrease in negative revenue growth results in a 6.4 percent increase in the growth rate of traffic tickets. Our results suggest that tickets are used as a revenue
generation tool rather than solely a means to increase public safety.
JEL Codes: H72, D72
Keywords: traffic tickets, public safety, political interest, law
enforcement
