What do Stockholm police think of the speed camera lottery?

In Queensland, Australia, an economic development committee recently released a report on speed cameras, complete with a set of recommendations for improving them. One proposal was to reward drivers who drove the speed limit with a discount on registration renewal fees for licenses. Queensland police dismissed the idea.

Acting Police Commissioner Ian Stewart today bluntly rejected the need for rewards.

“The law is the law. I expect people to obey the law at all times,” he told reporters in Brisbane.

“The people who need to be addressed are those who habitually don’t obey the law.”

Queensland Police Minister Neil Roberts was also lukewarm about the rewards suggestion. He said he thought increasing the chance of speed detection was “the greatest incentive for people to drive more carefully”.

“We will reward drivers who don’t speed by not fining them,” Mr Roberts said.

The reward discount on license fees parallels to the speed camera lottery experiment in Stockholm that enters law-abiding drivers into a lottery for a chance to win 20,000 kroner. Would Stockholm police, like their Australia counterparts, object to this idea?

Punishment and reward are two sides of the same coin – even if only one side is emphasized. The “reward” for driving the speed limit is escaping punishment. One of the lessons on the introduction of incentives is that when a financial reward is introduced into an environment where rules were previously held together by social norms and interactions, more rule-breaking can occur (this is most evident in the famous Israel day care study).

Driving behavior, like a lot of other common civic behaviors, operates under a system of punishment and no punishment, distinct from a system of punishment and reward that the Australian commission proposes. By using a financial incentive on one side, its absence on the other side stands in as an implicit reward. But the police objections still seem to distinguish the two: A social reward, or at least a social obligation, for driving the limit, and a financial punishment for exceeding it. It’s an open question whether Stockholm drivers display this kind of mental compartmentalization?

While the police see the introduction of the reward as a likely culprit in the demise of social norms, another hypothesis is that the speed cameras themselves are under suspicion. One area of civic behavior that displays similarities to safe driving is tax compliance. There is no reward for paying your taxes, only a punishment for not paying them. While the deterrence model of tax compliance argues that people fear the threat of an audit, the actual investigation rate is quite low. Why so many people pay taxes has been a puzzle to behavioral economists. A behavioral explanation rests on compliance as a mutual agreement between citizen and state that the taxes levied are collected fairly and legitimately. As more tax information today is automatically reported to the government through W-2 forms and third-party financial transaction data, the threat of an audit (even if the actual rate is still low) looms more powerfully because identifying tax fraud is so much easier.

Whether the increase in risk aversion is enough to explain tax compliance rates is a debate that behavioral economists and deterrence economists can argue over. More intriguing is the possibility that information disclosure weakens the social psychological contract even as it improves the efficiency of tax collection. In the old days, speeding, like taxes, was mostly on the honor system. As technology allows law enforcement to catch speeders more effectively, the sense of duty and safety that keeps drivers compliant may weaken too, turning the entire relationship from an unwritten code of honor to a more conventional legal-style contract of reward/punishment for action. If so, a few extra material goodies aren’t such a terrible idea.

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  • http://twitter.com/pricingright Rags Srinivasan

    The French police did an experiment to randomly pull-over good drivers and reward them with gas vouchers. (my take: http://goo.gl/6DTp)

    Here is another study on the effect of Stick vs. Carrot reported in today’s WSJ that validates the power of sticks over carrots:
    “Our main findings are that reemployment bonuses don’t seem to have worked, while benefit sanctions increased the job finding rate significantly,” the economists write.
    -rags