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Red Ink in the Rearview Mirror: Local Fiscal Conditions and the Issuance of Traffic Tickets

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  • Thomas A. Garrett
  • 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 the 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 that the issuance of traffic tickets does not decline in years following revenue increases. Elasticity estimates reveal that a 10 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. (c) 2009 by The University of Chicago. All rights reserved..

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Bibliographic Info

Article provided by University of Chicago Press in its journal The Journal of Law and Economics.

Volume (Year): 52 (2009)
Issue (Month): 1 (02)
Pages: 71-90

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Handle: RePEc:ucp:jlawec:v:52:y:2009:i:1:p:71-90

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Web page: http://www.journals.uchicago.edu/JLE/

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  1. Sobel, Russell S. & Holcombe, Randall G., 1996. "Measuring the Growth and Variability of Tax Bases over the Business Cycle," National Tax Journal, National Tax Association, vol. 49(4), pages 535-52, December.
  2. Tim Besley, 2002. "Political institutions and policy choices: evidence from the United States," IFS Working Papers W02/13, Institute for Fiscal Studies.
  3. Lave, Charles A, 1985. "Speeding, Coordination, and the 55 MPH Limit," American Economic Review, American Economic Association, vol. 75(5), pages 1159-64, December.
  4. Graves, Philip E. & Lee, Dwight R. & Sexton, Robert L., 1993. "Speed variance, enforcement, and the optimal speed limit," Economics Letters, Elsevier, vol. 42(2-3), pages 237-243.
  5. Oates, Wallace E, 1985. "Searching for Leviathan: An Empirical Study," American Economic Review, American Economic Association, vol. 75(4), pages 748-57, September.
  6. N. Gregory Mankiw, 1988. "The Optimal Collection of Seigniorage: Theory and Evidence," NBER Working Papers 2270, National Bureau of Economic Research, Inc.
  7. Thomas A. Garrett, 2002. "Aggregated vs. disaggregated data in regression analysis: implications for inference," Working Papers 2002-024, Federal Reserve Bank of St. Louis.
  8. Polinsky, A Mitchell & Shavell, Steven, 1992. "Enforcement Costs and the Optimal Magnitude and Probability of Fines," Journal of Law and Economics, University of Chicago Press, vol. 35(1), pages 133-48, April.
  9. Poterba, J.M. & Rotemberg, J.J., 1989. "Inflation And Taxation With Optimizing Governments," Working papers 521, Massachusetts Institute of Technology (MIT), Department of Economics.
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Cited by:
  1. Michael D. Makowsky & Thomas Stratmann, 2009. "More Tickets, Fewer Accidents: How Cash-Strapped Towns Make for Safer Roads," Working Papers 2009-02, Towson University, Department of Economics, revised Jun 2009.
  2. Sarah Marx Quintanar, . "Man vs. Machine: An Investigation of Speeding Ticket Disparities Based on Gender and Race," Departmental Working Papers 2009-16, Department of Economics, Louisiana State University.
  3. Makowsky, Michael & Sanders, Shane, 2013. "Political costs and fiscal benefits: The political economy of residential property value assessment under Proposition 212," Economics Letters, Elsevier, vol. 120(3), pages 359-363.

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