Competing For Your Business

By John Carr, NMA Massachusetts Activist

Price elasticity of demand — the change in demand for a product caused by a change in its price

One thing I noticed driving around America is how cheap littering fines are. I didn’t learn this by reading law books. States advertised their low fines on signs. They were competing for my trash.

I was so unprepared for the low fines that I missed a decimal point in one state. $12500 turned out to be $125.00, a savings of $9,875 compared to littering at home.

Cites in the Bay Area bid for red light runners. Their offers are on signs before traffic signals. In one area you can get the low, low price of $271. In others the cost is well over $300. I’m no extreme couponer, but I know a bargain when I see one.

Walnut Creek was cheapest in 2012. Check signs for current prices. Be aware that some signs lie.

Stuck in a construction delay and want to run somebody over? In the Midwest they tell you what it will cost. The first time I saw one of those signs I thought, what a bargain. Hitting a worker in a work zone is the same as a non work zone violation where I’m from, and running over people outside of work zones is free.

Remember, the more you hit, the more you save.

On my way home I was pleased to see protestors had posted many “end fine doubling” signs. I agree with the sentiment.

Actually those signs mark the start of a fines halved zone. You’ll find normal fines where there might be road work, children, animals, or accidents, or where the DOT had a quota of fine doubling zones it needed to meet. Where they can’t make an excuse, they have to charge only half normal fines.

You could use these signs to entertain the kids during a road trip. Ask them to add up all the numbers while you drive. (Except they’ve got their heads buried in a video screen the whole time, don’t they? Road trips used to be about the road trip.)

The serious part of what came before is this: we should end fine doubling and fine advertising.

Fine multiplier signs don’t affect behavior. A “doubled” fine is meaningless to drivers. Twice what? Being specific isn’t much of a help, because I don’t expect to incur that $100, $1,000, or $10,000 fine.

People react to an imminent threat rather than a remote possibility. For better or worse, cameras with low fines change behavior more than a 0.01% chance of getting caught in a regular speed trap.

In economic language, tickets are inelastic, meaning there is little change in behavior in response to price changes. So advertising price is pointless.

The Federal Highway Administration is preparing another rewrite of its traffic sign rules. There is pressure to make the rules shorter. FHWA could start by deleting the section authorizing fine warnings.

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