9/15/2004

Incentives Save Lives

Have you ever wondered why people do the things they do? Why people would sleep-in for twenty more minutes then franticly speed off to work? Why people will buy ten items for ten dollars at a store promotion, when a week earlier that same item cost a dollar?

As you think about that consider this. In Fairfax Virginia they installed some intersection cameras to catch drivers in violation of running red lights. Research showed according to the article entitled "Camera use deters red light running in Virginia community", in the Status Report for Highway Safety. Red light violations dropped by 44% in the first year the cameras were installed. Similar results were shown in Oxnard California with a 42% drop in red light violations with the introduction of intersection cameras. That's not even the interesting part. Research also showed that in both cities, they experienced a halo effect on other intersections that didn't exhibit intersection cameras and red light violations on those dropped by 34%.

So what does that mean to you and I? Well it's now safer to drive in Fairfax Virginia and Oxnard California, but to an economist its more than that. This is statistical evidence that people respond to incentives. In abiding by the law to not run red lights. That incentive was so strong it caused the same behavior to be exhibited at other stop lights not adorned with cameras. So if the incentive is strong enough, you could get a population to do just about anything.

3 comments:

Janet said...

There could be a halo effect on intersections that do not have the cameras or is it the idea of not knowing which intersections have cameras? Drivers may not know where these intersection cameras are located or may even forget. People try to out smart the system and those that have succeeded are the reason why the red light violations have not dropped the same amount in the other intersections. The cameras at certain intersections have helped other intersections because people ask the question, "What if this intersection also has one?" This still is reason enough to keep up the cameras, but is it really an incentive or just a question of what if?

John West said...

Very interesting study results. The interesting tidbit would have been to see if traffic accidents decreased as a result of this happenstance. In other words, what percentage of the time do red light offenders get into accidents because of doing so. If you want to be safe anywhere you go, watch out for the other driver. You can be a good driver and still get into a deadly auto accident. Also stay away from, as much as possible, two-lane highways and late night excursions(drunken drivers).

Dr. Tufte said...

-1

One incomplete sentence in the post.

Clearly the incentives work in this case.

Tha halo effect is interesting. Economists have a hard time explaining how these work. In fact, the profession was in denial about their existence for a long time (but a Nobel Prize was awarded 2 years ago to Dan Kahneman, a psychologist, for producing the evidence that convinced ecnomists that there was something there).

BTW: there is now a market in which firms supply technology to get out of those sorts of tickets.