Salience and Timely Compliance: Evidence from Speeding Tickets

Abstract

This paper studies the enforcement of fines, and, in particular, the effects of simplification and salience nudges on timely payments. In a randomized controlled trial, we add cover letters to 80,000 payment notifications for speeding. The letters increase the salience of the payment deadline, the late penalty, or both. Emphasizing only the deadline is not effective. Stressing the late penalty significantly and persistently increases payment rates. The effect is largest if both parameters are made salient. The most effective treatment yields a net revenue gain that covers approximately 25 percent of the labor costs of the ticket administration personnel. A survey experiment documents how the salience nudges alter prior (mis)perceptions about the communicated parameters. The survey results rationalize the differential effects of the treatments and, together with the evidence from the RCT, offer a broader framework for explaining why certain nudges are effective in some contexts but fail in others.

Driven by head or heart? Testing the effect of rational and emotional anti-speeding messages on self-reported speeding intentions

“…Such fines typically represent and highlight an administrative and financial interaction, i.e. sanctioning citizens for committing a traffic offence (du Plessis et al, 2020;Dušek et al, 2022;Hössinger and Berger, 2012). At the same time they can serve as public communication instruments to inform, sensitize and hence influence citizens' driving behavior (Bantjes et al, 2021;BIT UK, 2017;Haynes et al, 2013;John, 2017).…”

Nudging People to Pay Their Parking Fines on Time. Evidence from a Cluster-Randomized Field Experiment

“…Because unpaid parking fines comprise a large number of payments of relatively small amounts, enforcement is costly. The timely payment rate of traffic and parking fines in cities such as Berlin (75%), Chicago (67%) and New York (60%) shows that there is room for improvement (Dušek et al, 2022;Heffetz et al, 2022). Increasing the timely payment rate has clear benefits for both public administrations and individual citizens.…”

“…Timely payment reduces administrative enforcement costs (i.e., payment reminders, collection by a bailiff and legal proceedings) and related costs for the offender (i.e., late-payment fees and interest, legal fees, financial distress). Moreover, studies indicate that these additional costs disproportionally impact low-income households, who, on average, are less likely to pay their fines in a timely manner (Dušek et al, 2022;Harris et al, 2010;Heffetz et al, 2022;Mello, 2018).…”

“…Nevertheless, some behavioral tax studies show null (Kettle et al, 2017) or even negative (John & Blume, 2018) effects. Behavioral interventions in other enforcement domains such as compliance with municipal housing codes (Linos et al, 2020), payment for public utilities (Szabó & Ujhelyi, 2015), and the timely payment of delinquency fines (Haynes et al, 2013), speeding fines (Dušek et al, 2022), and parking fines (Heffetz et al, 2022) indicate that nudges can stimulate timely payment behavior in different law enforcement settings.…”

“…By analyzing exogenous variation in the timing of the notification letters they found that such reminders have a significant positive effect on aggregate response behavior. Dušek et al (2022) tested the effect of simplification and salience nudges on the timely payment of another type of traffic fines, i.e. speeding tickets by automated camera systems.…”