Improving payment of traffic fines with financial incentives: Discounts vs. penalties

• Published in: Transportation research. Part F, Traffic psychology and behaviour Vol. 74; pp. 298 - 306
• Main Authors: du Plessis, Sophia, Hartig, Bjoern, Jansen, Ada, Siebrits, Krige
• Format: Journal Article
• Language: English
• Published: Oxford Elsevier Ltd 01.10.2020; Elsevier Science Ltd
• Subjects: Discounts; Fines & penalties; Human behaviour; Incentives; Laboratory experiments; Late payments; Law enforcement; Norms; Payment systems; South Africa; Traffic accidents & safety; Traffic laws; Traffic safety; Traffic laws; Law enforcement; L91; D02; K42; South Africa; D04; C91; L98; Laboratory experiments; Human behaviour; B52
• ISSN: 1369-8478; 1873-5517
• DOI: 10.1016/j.trf.2020.08.019

•Controlled laboratory experiment tests the efficacy of different financial incentives on the payment of traffic fines.•Financial incentives increases voluntary payment of fines.•Improving the detection of violators have a positive effect on compliance by traffic law offenders. The effective enforcement of traffic laws is critical for improved road safety outcomes. Decisions to follow traffic rules and pay fines are influenced by formal institutions (e.g. laws, court summons, and fines) as well as informal institutions (e.g. norms and aspects of culture). Formal and informal institutions create incentives that should be designed to steer individuals’ behaviour towards desired outcomes. Unfortunately, there is no reason to believe that the institutions to deal with traffic violations in South Africa currently create effective incentives. This paper discusses the findings of a controlled laboratory experiment, conducted with a sample of university students, that tested the efficacy of different financial incentives that may influence the payment of traffic fines. An early payment discount was compared to a late payment penalty (used in other countries, for example, some states in the USA), and to the absence of any incentives. Furthermore, we examined whether the willingness to settle fines is sensitive to the likelihood of detection by the authorities. We found that introducing financial incentives significantly increases voluntary payment of fines, irrespective of whether immediate payment is encouraged with a discount or late payment is discouraged with a surcharge. In addition, subjects are more sensitive to the likelihood of detection when financial incentives are present.