Penalty-point system, deterrence and road safety: A quasi-experimental analysis

Yolanda F. Rebollo-Sanz, Jesús Rodríguez-López () and Núria Rodriguez-Planas

Journal of Economic Behavior & Organization, 2021, vol. 190, issue C, 408-433

Abstract: We use three complementary quasi-experimental approaches to study the causal effect of introducing a penalty-point system (PPS) in Spain in July 1 2006, on drivers' behavior. According to Regression-Discontinuity (RD) estimates, the PPS decreased the number of traffic offenders by 14%, and this deterrence effect was directly related to the severity of the penalty. Concerns that RD estimates may over- or under-state the longer-run effects of the policy change are addressed by presenting the Difference-in-Differences (DiD) estimates, which reveal that the deterrence effect of this reform increased over time. Crucially, the reform also curbed accidents by 14%, injuries by 16%, and fatalities by 14%, and these effects persisted over time. Difference-in-RD estimates are consistent with the other two approaches. Altogether, the reform represented net benefits of over 946 million EUR per year (or 0.09% of the Spanish GDP) during the first three years after implementation.

Keywords: Regulation and drivers behavior; Incentives; Public policy impacts; Deterrence effect (search for similar items in EconPapers)
JEL-codes: D04 I18 K42 R4 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:190:y:2021:i:c:p:408-433

DOI: 10.1016/j.jebo.2021.08.007

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