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Impact of Deterrence on Road Safety due to the Demerit Point System  \nChandler, Vincent  \nQueen’s University (Kingston, Canada)  \nJune 2012  \nOnline at [https://mpra. ub. uni-muenchen. de/39439/](https://mpra. ub. uni-muenchen. de/39439/)  \n[MPRA Paper No. 39439](MPRA Paper No. 39439) , [posted 13 Jun 2012 20:09 UTC](posted 13 Jun 2012 20:09 UTC)  \nAssessing the Impact of Deterrence on Road Safety due to the Demerit Point System  \nVincent Chandler 1  \n[chandlev@econ.queensu.ca](chandlev@econ.queensu.ca)  \nDepartment of Economics  \nDunning Hall, Room 333  \n94 University Avenue  \nQueen’s University  \nKingston, Ontario  \nK7L 3N6  \nAbstract  \nThis paper assesses the impact of demerit points on the probability of tra􀀎c violation of drivers. To address the heterogeneity of drivers, I use the expiration process of points to compare the behaviour of similar drivers with di􀀋erent demerit points. I 􀀌nd that the threat of losing a driver’s license a􀀋ects only drivers close to the limit, but reduces their probability of violation by 50 to 80 percent.  \nJEL Codes: K32, K42, Z18  \nJune 2012  \n1 The author wishes to thank the SAAQ for providing the data, and especially the help from Francois Tardif. I also acknowledge useful comments from Steve Lehrer, Susumu Imai, Robin Boadway, and the QED Empirical Economics Reading Group. This project was undertaken with the 􀀌nancial support from the Ontario Graduate Scholarship  \n1 Introduction  \nIn the judicial system, the threat of punishment is used to make sure citizens abide by the law. For drivers, this punishment takes the form of a 􀀌ne. For drivers in a country implementing a demerit point system, an accumulation of 􀀌nes leads to a greater punishment: the revocation of their license. Bourgeon and Picard (2007) study theoretically this type of incentive structure, and show that the demerit point system removes bad drivers from the road and reaches a social optimum. Pulido et al. (2010) 􀀌nd that the introduction of demerit points in Spain in 2006 reduced the road-related mortality by 14.5 percent 2 . Dionne et al. (2011) provide some micro-empirical evidence that drivers closer to the limit adopt a safer behaviour and have a lower probability of violation. To do so, they compare the average residual probability of tra􀀎c violation of drivers with 7 points with the one of drivers with 9 points, and determine that this risk decreases by 20 percent over the interval. If drivers with 7 and 9 points were homogeneous, then this di􀀋erence in probability would re􀀍ect the impact of an increase in the number of points on the behaviour of drivers. However, since drivers with 7 points are probably safer drivers than those with 9 points, this di􀀋erence is only a lower bound for the actual impact of deterrence. This heterogeneity problem is omnipresent in the literature on the impact of deterrence (e.g. Helland and Tabarrok, 2007) .  \nThe objective of this paper is to address this heteogeneity and assess the impact of demerit points on the behaviour of drivers. To do so, I use the expiration of tra􀀎c violations after two years as a quasi-exogenous variation in the number of points: two similar drivers have the same number of points at time “t”. Due to the timing of their violations, some points of one driver will expire, while the other driver will keep the same number of points. In that sense, two ex-ante similar drivers now have a di􀀋erent number of demerit points at time “t+1”. By comparing the probability of violation of both groups for a given number of demerit points, I can assess the impact of the number of demerit points on the probability of violation. Using this method, I 􀀌nd that for drivers with 10 points a decrease of 3 points leads to an increase of 50 percent in the probability of violation. For drivers with 14 points, a decrease of 3 points increases the probability of violation by 80 percent.  \n To determine this impact,  this paper uses the administ","cbCaigR9GWCbt9ys","https://ap.wps.com/l/cbCaigR9GWCbt9ys","pdf",170065,27,"English","# Abstract\n# Introduction\n# Basic Model\n# Data","[{\"question\":\"What does the paper analyze about demerit points and road safety?\",\"answer\":\"It evaluates whether demerit points deter traffic violations by changing drivers’ behavior and the probability of being caught.\"},{\"question\":\"How does the paper handle differences among drivers (heterogeneity)?\",\"answer\":\"It compares similar drivers by exploiting the expiration of points over time, creating variation in point totals at a later moment.\"},{\"question\":\"What is the main finding about which drivers are affected by license-loss threats?\",\"answer\":\"The deterrent effect appears only for drivers close to the maximum point limit, and it reduces their violation probability by roughly 50–80%.\"}]","Assessing the Impact of Deterrence on Road Safety due to the Demerit Point System | PDF",1789860257,68]