July 16, 2008
Incentives Matter: Traffic Ticket Edition

John Stossel writes,

Day after day in Warren, Mich., people wait in a long line to pay traffic fines. Many are there because police say they didn't come to a full stop at a stop sign. Often the policeman saying that is Officer David Kanapsky.

On last week's "20/20," you heard a motorist in court insist that she did come to a complete stop. The judge replied, as judges there often do: "I find Officer Kanapsky's testimony to be credible. He is an unbiased witness."

But the officer is not really unbiased. The more tickets he writes, the more overtime he gets. Last year, Kanapsky spent so much time in court he increased his pay by $21,000.

The public choice nature of Stossel's piece (as McChesney and Shughart once wrote, "Homo politicus and homo economicus are the same.") reminded me of the Makowsky and Stratmann paper on the political economy of traffic tickets. I've put the abstract below the fold.

In this paper we study the political economy determinants of traffic fines. 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 fine and the larger its' amount. 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 less dependent on revenues from tourism. For state troopers, who are not employed by the local, but rather the state government, we do not find evidence that the likelihood of traffic fines varies with town characteristics. Finally, personal characteristics, such as gender and race, are among the determinants of traffic fines.
Posted by E. Frank Stephenson at 10:58 AM in Economics

The statesman who should attempt to direct private people in what manner they ought to employ their capitals would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it. -Adam Smith

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