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

Author

Listed:
  • Libor Dusek

    (Charles University, Faculty of Law, and University of Economics, Prague)

  • Nicolas Pardo

    (Hertie School, Berlin)

  • Christian Traxler

    (Hertie School, Berlin; Max Planck Institute for Research on Collective Goods; CESifo)

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.

Suggested Citation

  • Libor Dusek & Nicolas Pardo & Christian Traxler, 2020. "Salience, Incentives, and Timely Compliance: Evidence from Speeding Tickets," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2020_09, Max Planck Institute for Research on Collective Goods.
    • Handle: RePEc:mpg:wpaper:2020_09
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    Cited by:

    1. Sinning, Mathias & Zhang, Yinjunjie, 2023. "Social norms or enforcement? A natural field experiment to improve traffic and parking fine compliance," Journal of Economic Behavior & Organization, Elsevier, vol. 210(C), pages 43-60.

    More about this item

    Keywords

    Enforcement; fines; timely compliance; salience; nudges; deadlines; perceptions; RCT; RDD;
    All these keywords.

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

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