The Economics of Transport Law Enforcement

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An overview of the theory and practice of enforcement economics in transport

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  • The Economics of Transport Law Enforcement

    1. 1. TRANSPORT LAW ENFORCEMENT: A FRAMEWORK FOR THE OPTIMISATION OF ECONOMIC BENEFITS Dr. MARK BROWN – HALCROW, UK ETC 2006 STRASBOURG
    2. 2. Contents of presentation <ul><li>Context and issues </li></ul><ul><li>An economic model of enforcement and deterrence </li></ul><ul><li>Case studies: speeding, bus lanes, congestion charging </li></ul><ul><li>Conclusions </li></ul>
    3. 3. THE ISSUES <ul><li>Sophisticated traffic management measures rely increasingly on enforcement </li></ul><ul><li>Traffic management measures can be expensive… </li></ul><ul><li>… but poorly enforced (Large numbers of traffic offences - 6 Million road traffic offences in UK; estimated 50%+ of motorists break speed limits) </li></ul><ul><li>Enforcement itself is expensive - estimated £3Bn/yr on policing transport </li></ul><ul><li>Government(s) calling for ‘evidence based policy’ to justify expenditure </li></ul>
    4. 4. A RATIONAL APPROACH TO TRAFFIC LAW ENFORCEMENT <ul><li>Can Enforcement activities be used to improve efficiency of transport system? </li></ul><ul><li>If so, how should efficient enforcement resources be allocated? </li></ul><ul><li>How can performance of different enforcement programmes be measured and evaluated </li></ul><ul><li>How should economic principles determine the optimal levels of resource allocation </li></ul>
    5. 5. AN ECONOMIC APPROACH TO ENFORCEMENT <ul><li>How much should we spend/invest in enforcement? </li></ul><ul><li>What type of benefits can we expect? </li></ul><ul><li>What is the efficient level of offending? </li></ul><ul><li>How many offences should be permitted and how many deterred or apprehended? </li></ul><ul><li>How can enforcement bodies use such rational principles in practice? </li></ul>
    6. 6. THE OPTIMAL LEVEL OF ENFORCEMENT Number of Offences per year Social Cost £m/yr Enforcement Effort High Enforcement Cost High Damage Cost – too many offences Optima The ideal No. offences!
    7. 7. ENFORCEMENT ISSUES <ul><li>Need to accept key objectives of minimising social cost (cost of enforcement + cost of damage resulting from offending) </li></ul><ul><li>Potential for some de-criminalisation </li></ul><ul><li>Public acceptability </li></ul><ul><li>Strategic enforcement decisions </li></ul><ul><li>Local enforcement decisions </li></ul>
    8. 8. BECKER’S ENFORCEMENT FRAMEWORK <ul><li>Social cost of enforcement </li></ul><ul><li>Cost of prosecution and punishment </li></ul><ul><li>Social damage cost of harm due to offences </li></ul><ul><li>Gain to offenders from their actions </li></ul><ul><li>Relative effects of changes in the certainty and severity of punishment </li></ul><ul><li>Quantification of the demand function in order to forecast the supply of offences </li></ul><ul><li>How many traffic offences should be permitted? </li></ul>
    9. 9. ENFORCEMENT AND DETTERENCE MODELS COST OF ENFORCEMENT, PROSECUCTION AND PUNISHMENT COST OF DAMAGE TO SOCIETY GAIN TO OFFENDERS SOCIAL COST + + = NUMBER OF OFFENCES CERTAINTY OF CONVICTION SEVERITY OF PUNISHMENT
    10. 10. Gain to offenders? <ul><li>A valid economic benefit – illegal parking, goods vehicle overloading, speeding, etc </li></ul><ul><li>A useful modelling concept, in that the optimum conditions are: </li></ul><ul><li>Gain (O`) = Social Damage (SD`) = deterrence (p.f) </li></ul>
    11. 11. Deterrence Model <ul><li>Select the appropriate policy weapon…. </li></ul><ul><li>… In simple terms: </li></ul><ul><li>P * f = deterrence = disutility of offending </li></ul><ul><li>Where: </li></ul><ul><li>P = certainty of sanctions </li></ul><ul><li>F = severity of sanctions </li></ul><ul><li>With potential for added degrees of complexity: </li></ul><ul><li>[P * (f + E)] + N = deterrence </li></ul><ul><li>Where: </li></ul><ul><li>E = informal costs of apprehension </li></ul><ul><li>N = loss of legitimate income </li></ul>
    12. 12. CASE STUDIES <ul><li>Speed cameras </li></ul><ul><li>Bus lane enforcement </li></ul><ul><li>Congestion charging </li></ul>
    13. 13. Worked example 1 – speed cameras <ul><li>Example is for road with 20 camera sites </li></ul><ul><li>Issue is how many should be loaded with film </li></ul><ul><li>Enforcement and prosecution costs known </li></ul><ul><li>Main social damage cost is accidents – which can be predicted </li></ul>
    14. 14. Deterrence effects – proportion of current offenders who would still offend 85% 84% 80.5% 78% 71.5% 47.5% 21.5% £60 + 3 penalty points 75% 74% 71% 68% 62% 40% 18% £80 + 3 penalty points 95% 94% 90% 88% 81% 55% 25% £40 + 3 penalty points 1 in 20 1 in 16 1 in 10 1 in 8 1 in 5 1 in 2 1 in 1 Fine Number of cameras in operation
    15. 15. Reduction in offences and accidents Data for £60 penalty £35 £37 £46 £53 £71 £154 £304 Reduction in accident cost (’000) £1,919 £1,916 £1,907 £1,901 £1,883 £1,800 £1,650 Annual accident cost (’000) 98% 98% 98% 97% 96% 92% 84% % accidents still occur (P  ) 85% 84% 80.5% 78% 70.5% 47.5% 21.5% % still offending (P) 1 in 20 1 in 16 1 in 10 1 in 8 1 in 5 1 in 2 1 in 1 Number of cameras in operation
    16. 16. Costs & benefits of speed cameras 90 52 58 77 121 204 240 Net finance+Social benefit -27 -40 -72 -90 -143 -234 -157 N et social benefits £35 £37 £46 £53 £71 £154 £304 Social benefit (accidents) -£78 -£97 -£149 -£180 -£264 -£438 -£397 Minimum offenders impact £17 £21 £31 £37 £50 £50 -£64 Total for enforcement institutions £78 £97 £149 £180 £264 £438 £397 Penalty revenue -£52 -£64 -£98 -£118 -£174 -£288 -£261 Prosecution cost -£10 -£12.5 -£20 -£25 -£40 -£100 -£200 Enforcement cost Recurrent costs and benefits 1 in 20 1 in 16 1 in 10 1 in 8 1 in 5 1 in 2 1 in 1 Change in impact Number of cameras in operation (ie: no. with film)
    17. 17. What the analysis tells us <ul><li>Largest impact on accidents from 1:1 operable </li></ul><ul><li>Best cost (revenue) recovery from 1:2 or 1:5 operable </li></ul><ul><li>Minimal social costs from 1:20 </li></ul><ul><li>Best cost recovery and highest social benefit from 1:1 </li></ul><ul><li>If accident costs weighted at 1.66, 1:1 operable optimal, social costs & financial (eg: due to policy priority) </li></ul>
    18. 18. Example 2 - Bus Lane enforcement <ul><li>Issue: how many buses to fit with enforcement cameras </li></ul><ul><li>Costs of enforcement known </li></ul><ul><li>Social damage cost largely that of delay to bus passengers and additional bus operating costs </li></ul>
    19. 19. Bus lane camera enforcement -£4,200 -£5,196 -£8,140 -£10,067 -£15,241 -£30,309 -£37,237 Offenders (lower limit) £ 12,000 £ 16,000 £ 24,000 £ 28,000 £ 48,000 £120,000 £200,000 Wider society -£6,800 -£8,496 -£ 13,581 -£ 16,969 -£27,089 -£67,165 -£132,660 Enforcement institutions Summary of impacts by impact group £12,000 £16,000 £24,000 £28,000 £48,000 £120,000 £200,000 Social benefit of less offending -£4,200 -£5,196 -£8,140 -£10,067 -£15,241 -£30,309 -£37,237 Benefits to offenders lower limit) £4,200 £5,196 £8,140 £10,067 £15,241 £30,309 £37,237 Fine Revenue -£4,500 -£5,567 -£8,722 -£10,786 -£16,330 -£32,474 -£39,897 Cost of punishment -£6,500 -£8,125 -£13,000 -£16,250 -£26,000 -£65,000 -£130,000 Cost of enforcement 1 in 20 1 in 16 1 in 10 1 in 8 1 in 5 1 in 2 1 in 1 Proportion of buses with cameras
    20. 20. Conclusions from bus lane enforcement analysis <ul><li>Social benefits maximised by 1 camera per bus </li></ul><ul><li>If social costs to offenders considered, optima becomes 1:16 </li></ul><ul><li>Financial impact on enforcement institutions consistently poor and proportionate to level of enforcement </li></ul>
    21. 21. Example 3 - Congestion charging cameras Addition of one more mobile camera site – Increases chances of Detection from 80% to 82.7% 39% 50% 18.75% 80% 16.95% 82.7% 12% 90% Proportion continuing to offend Probability of detection
    22. 22. Congestion charging <ul><li>Economics: </li></ul><ul><li>Cost of additional camera £300,000/year </li></ul><ul><li>1,310 fewer offences/day detected save £460,000/year in prosecution costs </li></ul><ul><li>Congestion saving valued at £3.6m/year </li></ul><ul><li>= Large net social benefit (£3.76m) </li></ul><ul><li>Finance: </li></ul><ul><li>1,310 fewer offences detected also reduces fine income by £11m/year </li></ul><ul><li>= large financial loss (£11.160m) </li></ul>
    23. 23. Implications of case studies <ul><li>Optimise: social cost finance policy issues </li></ul><ul><li>Speed cameras fewer more policy weights? </li></ul><ul><li>Bus lane cameras more fewer PT strategy? </li></ul><ul><li>Cong charging more fewer affordability? </li></ul>
    24. 24. Conclusions from case study analysis <ul><li>Be clear about objectives – economic or financial + treatment of gain to offenders </li></ul><ul><li>Enforcement is generally expensive – high levels of policing often fail cost-benefit test </li></ul><ul><li>Other aspects of deterrence (eg: fine) may need to be considered to improve economic performance </li></ul><ul><li>Financial optimum is neither that which maximises social benefits nor minimises social costs </li></ul>
    25. 25. CONCLUSIONS <ul><li>An economic approach will improve resource allocation decisions </li></ul><ul><li>It will identify the true social cost of offences </li></ul><ul><li>It will also help to target enforcement activities and measure their performance </li></ul><ul><li>It can assist at a strategic level – setting budgets for enforcement bodies </li></ul><ul><li>It can also help design local enforcement programmes </li></ul><ul><li>It supports ‘best value’, ‘evidence based’ and ‘value for money’ programmes </li></ul>
    26. 26. The End <ul><li>The ideal level of enforcement is generally >0% but <100% - economics helps us define the optimum </li></ul><ul><li>Thank-you for your attention </li></ul>

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