Monday, July 26, 2010

Political economy of speed cameras when the ticket price is not set close to equilibrium price

The State of Arizona has taken down their automated speeding ticket cameras. This despite an initial argument that it increases safety and only enforces that law with a 10 mph cushion above the speed limit. The State failed to see the unintended consequenses. So after paying 20 million to put up the cameras, the Arizona Politicians are now realizing the huge cost in time that they were imposing on their drivers by making them slow
down 5 to 10 miles per hour. I would also guess that the transaction cost to collect their tickets is fairly substantial. More evidences of the motive is the State of Arizona made it a Civil Penalty to avoid litigations cost that would reduce their net revenue (rent).

It looks like the folks with the pickaxes may have had more sense than the legislature did when the cameras where installed. A ticket may improve public safety but it still has a price that needs to be considered. Also note the revenue from the camera was 50% lower than initial projections, how did that play into the calculations?


(Thanks to JS for the guest post! Those are good questions, sir. What is happening in the rest of the country, and world, with those automatic cameras?)

1 comment:

David said...

Here comes another VSL study...