(OT) NY Times - I'm shocked, shocked I say.
From: Dennis Liu (bigheaddennisgmail.com)
Date: Mon, 3 Sep 2007 20:13:03 -0700 (PDT)
http://www.nytimes.com/2007/09/02/business/yourmoney/02view.html?ex=13463856
00&en=3433641694d7701e&ei=5090

September 2, 2007

Economic View
Welcome, Stranger. Here's a Speeding Ticket. 

By JUDITH CHEVALIER

DRIVING through a tiny Vermont town a few weeks ago on my way to drop off my
daughter at camp, I saw flashing yellow lights appear in my rearview mirror.


My car had picked up speed coming down a hill, and a police officer pulled
me over. As I waited for a ticket, I wondered: Does this town supplement its
finances by giving tickets to visitors like me? 

I never got to the bottom of the situation in that particular town, but the
broader question - whether police officers in some towns are motivated by
fund-raising as well as safety when writing traffic tickets - has been
examined systematically by others. Michael D. Makowsky, a doctoral student
in economics, and Thomas Stratmann, an economics professor, both at George
Mason University, studied the issue in a recent paper, "Political Economy at
Any Speed: What Determines Traffic Citations?" 


They examined every warning and citation written by police officers in all
of Massachusetts, excluding Boston, during a two-month period in 2001 - over
60,000 in all. Their conclusion wasn't shocking to an economist: money
matters, even in traffic violations. They found a statistical link between a
town's finances and the likelihood that its police officers would issue a
speeding ticket. The details are a little sticky, but they show that tickets
were issued more often in places that were short on cash, and that
out-of-towners received tickets more often than drivers with local
addresses. 

First, some background: In Massachusetts, a police officer is given the
discretion to decide whether to issue a warning, which carries no fine, or a
citation, which does. The fines for the tickets issued in that period by
local police officers totaled $1.8 million, with state troopers issuing $1.7
million more in tickets. The study focused on the local police.

Municipal finance in Massachusetts is affected by Proposition 2.5, which in
1980 placed a cap on overall property tax levies and on their rate of
growth. It turns out that traffic tickets are affected by the proposition,
too - or at least that's what the study found. 

Under Proposition 2.5, total property tax collections cannot rise more than
2.5 percent a year, but local voters can override that restriction by
passing a referendum. The researchers assumed that, on average, towns that
had proposed to override referendums but failed to pass them were more
constrained financially than other towns. In fact, they found that for
drivers who exceeded the speed limit by any given amount, the probability of
receiving a fine rather than a warning from a local police officer increased
by 28 percent if the town's voters had rejected a Proposition 2.5 override
in a referendum.

Mr. Makowsky and Mr. Stratmann also showed that out-of-town drivers -
especially out-of-state drivers - were much more likely to get citations. A
driver from out of town had a 10 percent higher probability of getting a
ticket than a local driver, holding speed and other characteristics
constant. Out-of-state plates added 10 percent to the probability of getting
a ticket. 

Furthermore, if an out-of-town driver happened to be driving in a town that
had rejected a Proposition 2.5 override, he or she had a 37 percent higher
chance of getting a ticket than a local driver traveling at the same speed.
"This suggests that the local voters who voted down the tax increases have
had some success in passing off their tax burden to nonvoters," Mr.
Stratmann said. 

He and his co-author speculated that the seeming discrimination against
out-of-towners by the local police might be explained by two factors: a
desire to avoid antagonizing local voters and a preference for ticketing
people who were less likely to travel to court to protest a ticket. 

The phenomenon noted in the study may have implications beyond speeding
tickets. During the housing price run-up, property tax revenue in the United
States rose substantially - by 20 percent over all from 2002 to 2005. With
housing prices now flat or down, town governments may try to seek property
tax rate increases, and voters may resist. Historically, economists have
noticed that when there is a lid on property taxes, towns turn to user fees
and other sources of revenue - like speeding tickets - to avoid spending
cuts.

Assuming that the study's results have some predictive power for other
states, it may seem surprising that I received only a warning from the
officer who stopped me in Vermont, despite my Connecticut license plates. In
their paper, Mr. Makowsky and Mr. Stratmann did find that ticketing was
modestly lower in towns with high levels of employment in the hospitality
industry, suggesting that police departments might consider the effects of
aggressive ticketing on local commerce.

Perhaps the officer wanted to make sure that my daughter would return to
camp next summer - or perhaps he really just wanted me to slow down. 

Judith Chevalier is a professor of economics and finance at the Yale School
of Management.

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