Salience, Incentives, and Timely Compliance: Evidence from Speeding Tickets

Abstract

This paper studies the enforcement of fines. We randomly assign 80,000 speeding tickets to treatments that increase the salience of the payment deadline, late penalties, or both. Stressing the penalties significantly and persistently increases payment rates. Emphasizing only the deadline is not effective. The findings from the RCT are consistent with a survey experiment which documents the treatments' impact on priors about parameters of the compliance problem. Exploiting discontinuous variation in fines, we then document a strong price responsiveness: a 1% increase in the payment obligation induces a 0.23 percentage point decrease in timely compliance. This semi-elasticity suggests that the impact of the salience nudges is equivalent to the effect of a 4-9% reduction in fines.

Learning from Law Enforcement

“…Convicted drivers are further punished by a deduction in demerit points. A companion paper studies the enforcement process in more detail (Dusek et al, 2019). 14 We verified whether citizens requested information about the level of the enforcement cutoff from the local authority under the Freedom of Information Act.…”

Social norms or enforcement? A natural field experiment to improve traffic and parking fine compliance

“…Du Plessis et al (2020) present findings from a laboratory experiment, which suggest that the provision of financial incentives (discounts for immediate payments or surcharges for late payments) increases fine payments. Our study is most closely related to Dusek et al (2020), who use data from a large-scale natural field experiment of speeders in Czech Republic to provide evidence on the effectiveness of letters that increase the salience of penalties for late payments. They conclude that these letters are even more effective when combined with the communication of a payment deadline.…”

“…Firstly, while Dusek et al (2020) use enforcement letters to improve the compliance behavior of recent offenders, our enforcement letter is designed to target offenders who have not paid their fines for more than six months. Understanding the effectiveness of enforcement messages that aim to improve the collection of long outstanding debts is important for local government budgets.…”

“…To the best of our knowledge, this is the first time that a natural field experiment is used to ascertain the effectiveness of addressing social norms in the context of fine compliance. Thirdly, while Dusek et al (2020) focus on speeders, we examine the effectiveness of letters on both traffic and parking fines. Our findings indicate that the responses of speeders may be different from those of non-speeders.…”

“… See Andreoni et al (1998) andSlemrod (2019) for general reviews on tax compliance,Luttmer and Singhal (2014) for a review on tax morale, andMascagni (2018) andHallsworth (2014) for reviews on tax experiments.4 Exemptions includeHaynes et al (2013), Du Plessis et al (2020 andDusek et al (2020). See Section 2.2 for details.5 It has been argued that fines should impact offenders equally, which is not the case in a fixed-rate fine system that affects low-income offenders disproportionately(Chapman et al, 2004).…”