Skip to main content
Log in

Road Traffic and Efficient Fines

  • Published:
European Journal of Law and Economics Aims and scope Submit manuscript

Abstract

Road traffic is a typical example of an occupation with bilateral care and activity choices. In such a setting, common liability rules which simply divide damages cannot induce efficient outcomes. It is shown that fines for the violation of traffic regulations which depend on the occurrence of an accident can induce optimal behaviour. The properties of such efficient fines are derived. In particular, efficient fines tend to increase more than proportionally with the severity of an offence, while fines for repeat offenders can rise at a decreasing rate with the number of violations. To evaluate the scope for efficiency-enhancing reforms of fine systems, it is investigated whether actual regulations particularly for speeding conform to the non-proportionality requirement in selected European countries.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • Becker, G. S. (1968). “Crime and Punishment: An Economic Approach.” Journal of Political Economy. 76, 169–217.

    Google Scholar 

  • de Meza, D. (1986). “The Efficiency of Liability Law.” International Review of Law and Economics. 6, 107–113.

    Google Scholar 

  • Dewees, D., Duff, D., & Trebilcock, M. (1996). Exploring the Domain of Accident Law, New York and Oxford: Oxford University Press.

    Google Scholar 

  • Dickerson, A., Peirson, J., & Vickerman, R. (2000). “Road Accidents and Traffic Flows: An Economic Analysis.” Economica. 67, 101–121.

    Google Scholar 

  • Edlin, A. S. (1999). Per-Mile Premiums for Auto Insurance, NBER Working Paper 6934.

  • Endres, A. (1989). “Liability and Information.” Journal of Institutional and Theoretical Economics. 145, 249–274.

    Google Scholar 

  • Finsinger, J. & Pauly, M. V. (1990). “The Double Liability Rule.” The Geneva Papers on Risk and Insurance Theory. 15(2), 159–169.

    Google Scholar 

  • Goerke, L. (2002). “Accident Law: Efficiency May Require an Inefficient Standard.” German Economic Review. 3(1), 43–51.

    Google Scholar 

  • Green, J. (1976). “On the Optimal Structure of Liability Laws.” Bell Journal of Economics. 7, 553–574.

    Google Scholar 

  • Hindley, B. & Bishop, B. (1983). “Accident Liability Rules and Externality.” International Review of Law and Economics. 3, 59–68.

    Google Scholar 

  • Kenkel, D. S. (1993). “Do Drunk Drivers Pay Their Way? A Note on Optimal Penalties for Drunk Driving.” Journal of Health Economics. 12, 137–149.

    Google Scholar 

  • Landes, E. M. (1982). “Insurance, Liability, and Accidents: A Theoretical and Empirical Investigation of the Effect of No-fault Insurance.” Journal of Law and Economics. 25, 49–65.

    Google Scholar 

  • Litman, T. (1997). “Distance-Based Vehicle Insurance as a TDM Strategy.” Transportation Quarterly. 51(3), 119–137.

    Google Scholar 

  • Neidhart, H. (2000). Bußgeld im Ausland, München: ADAC-Verlag.

    Google Scholar 

  • Retzko, H.-G. & Korda, C. (1999). Auswirkungen unterschiedlicher zulässiger Höchstgeschwindigkeiten auf städtischen Verkehrsstraßen, Berichte der Bundesanstalt für Straßenwesen, V 65.

  • Schmitz, P. (1997). “Sollten Haftungsregeln durch Strafen ergänzt werden?” Jahrbuch für Wirtschaftswissenschaften. 49, 351–360.

    Google Scholar 

  • Shavell, S. (1980). “Strict Liability vs. Negligence.” Journal of Legal Studies. 9, 1–25.

    Google Scholar 

  • Shavell, S. (1987). Economic Analysis of Accident Law, Cambridge, MA: Harvard University Press.

    Google Scholar 

  • Statistisches Bundesamt. (1999a). Verkehrsunfälle 1998, Fachserie 8—Reihe 7, Stuttgart: Metzler-Poeschel.

    Google Scholar 

  • Statistisches Bundesamt. (1999b). Statistical Yearbook 1999 for the Federal Republic of Germany (German edition), Stuttgart: Metzler-Poeschel.

    Google Scholar 

  • Statistisches Bundesamt. (2001). Verkehrsunfälle 2000, Fachserie 8—Reihe 7, Stuttgart: Metzler-Poeschel.

  • Stigler, G. J. (1970). “The Optimum Enforcement of Laws.” Journal of Political Economy. 78, 526–536.

    Google Scholar 

  • Tullock, G. (1981). “Negligence Again.” International Review of Law and Economics. 1, 51–62.

    Google Scholar 

  • Vickrey, W. (1968). “Automobile Accidents, Tort Law, Externalities, and Insurance: An Economist's Critique.” Law and Contemporary Problems. 33, 464–487.

    Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Rights and permissions

Reprints and permissions

About this article

Cite this article

Goerke, L. Road Traffic and Efficient Fines. European Journal of Law and Economics 15, 65–84 (2003). https://doi.org/10.1023/A:1021101908116

Download citation

  • Issue Date:

  • DOI: https://doi.org/10.1023/A:1021101908116

Navigation