Do Higher Fines Reduce Recidivism?

This paper investigates the effect of the height of speed fines on recidivism by exploiting variation from a governmental increase of speed fines with twenty percent. We estimate local difference-in-differences models using population data of all offenders from the months before and after the introduction of the higher speed fines. Our estimates do provide evidence for a reducing effect of higher speed fines on recidivism for the group of light offenders. In addition, light offenders did reduce their speed. These reducing effects are not observed for the heavy group of offenders. Our estimates do not provide evidence for a reducing effect on the total number of fines, due to the higher fines. Moreover, we find no effect on the sum of fines in the year after the offense. Higher speed fines do also not extend the time till the next offense.