It has a constant negative effect so you need a penalty that has a constant discouraging effect.

A flat fee doesn't discourage those with more money to pay it. It simply says "speeding is OK if you have enough money."

No it doesn't. A fine's discouraging effect is proportional to the person's ability to pay for it.

I ran through the model in other comments, so I won't repeat it here, but in general the disincentive is the same, but people's desire to do something that costs a certain amount goes up with their wealth (called an income effect in economics).

> A constant fine has a constant discouraging effect.

In this scenario it is constant percentage though, as far as I understand it, and therefore should be constantly discouraging.

How so? I explained the model at length elsewhere in this thread.

> Therefore, if the rate is higher for some people, it's either insufficiently disincentivizing poorer people from speeding, or excessively disincentivizing richer people.

I don't understand how you reached this conclusion.

> Speeding has a constant negative effect on society. It doesn't vary based on how wealthy the speeder is.

The point of a speeding ticket isn't to make things right or to make amends for the bad effects of irresponsible driving. That would be impossible, since people die. The point of a speeding ticket is to serve as a carrot, or to be "pigovian" to use the term that you just made me look up. Since you understand that well enough to apply the word, I don't see why you could possibly argue that they should be constant, since 1% of people or so can (and do) just straight up ignore the law otherwise. A frequently reposted thread explains the reasoning well - https://i.imgur.com/3OeKrA2.jpg

I think the argument is over whether the fine must be denominated in currency units. As I understand it the Finnish system chooses to price their speeding crimes in days of spending money. If you don't mind paying the fine in those units, you can just as well ignore the law.

Yes, if you value doing something more than the negative value to society, you should be permitted to do it. This is the entire point of pigovian taxes.

The trick here is to apply the golden rule and adjust the negative-value (an average-stranger's death) to the equivalent value applied to you (apparently-rich-stranger's death). Then you'll realise the cost of the fine needs to increase proportionally to your wealth (no, I'm not actually a fan of valuing people by their wealth, but you seem to be implicitly arguing for that).

No, because a wealthier person is not more likely to harm a wealthy person while speeding. Again, the harm is constant and does not depend on the speeder's wealth.

Oh, I see what you're saying. Then no, taxes like this are not pigovian if pigovian means (wiki:) to "correct an undesirable or inefficient market outcome, and [to do so] by being set equal to the social cost of the negative externalities".

Again, that goal is impossible with speeding tickets. The "negative externality" in this case is literally that someone dies. Someone (a lot of someones) lose their kid, their life partner, their parent. Can you apply relatively simple financial analysis to assign a dollar value to that? Sure, but fuck the kind of person that wants to do that; that is not acceptable for any so-called "justice system."

The point of the tax is not to "correct the undesirable outcome" but rather to avert it as much as possible using reasonable techniques.

And no, the rich absolutely should not be allowed to do it more.

Pigovian taxes are applied to mortal situations all the time. The most famous example is probably a carbon tax.

>The point of the tax is not to "correct the undesirable outcome" but rather to avert it as much as possible using reasonable techniques.

If you want to avert it as much as possible, set a million dollar fine for everyone. Why is that unreasonable in your view? If you don't think that would be a good idea, you're implicitly valuing it at less than a million dollars.

Well, I don't have a million dollars, so I wouldn't be able to pay that fine. It does not make sense to try to implement an unsupportable system.

I did not say a good objective was to avert people from speeding "as much as possible" (or I would simply destroy all cars). I said "as much as possible using reasonable techniques." I am not trying to revolutionize the field of public policy economics, here; I am just arguing against a system that assumes that a dollar means the same thing to me that it does to Steve Jobs; it does not, and some adjustment is appropriate.

You're definitely arguing with various premises of public policy economics. Although you believe monetary fines are appropriate, you also claim to think we can't trade-off sacred values such as avoiding crime against mundane values like money.

The beauty of a Pigovian system is it doesn't require any assumptions as to how much money is worth to different people, or for that matter how much actions are worth. It just calculates the harm to society of the action and sets a fine accordingly. This is very much standard economics, see https://www.jstor.org/stable/725557 with 300 citations.

>I don't understand how you reached this conclusion.

Set X= negative value to society of an action we want to discourage, and Y= probability of getting caught.

If a fine is set at X/Y, then the expected cost of doing this action is X (fine times probability), and so it will be done if the value of doing it is above X and won't be done if the value is below X, which is efficient. Any value other than X/Y is inefficient.

The model you've presented doesn't account for a lot of other effects which we want as a collective want to account for. Let's break it down.

We can't assume perfect humans, so we must assume that sometimes, some of the people will act irrationally or make mistakes. Introducing this "error rate" into our actors means there's an un-removable noise floor of cases where we issue fines to our actors for breaking the law.

This noise-floor of mistakes leads to some very unfortunate side effects when we use constant fine pricing. Assuming an income distribution like what we have in reality, this means that a certain percentage of our population will have so little income that the fine will ruin their life, making them less effective and thus our population less effective. And there's no way we can remove this by adjusting the price of our constant fine. If we remove the fine, then everyone speeds. Even at the best sweet spot, we'll have a system where some people will always speed, and some people will never rationally choose to speed but will be economically "killed" by the fine anyway.

These two inefficiencies are what variable fine pricing are meant to address. By scaling price with actor income, we are able to maintain a similar relative (dis)incentive across income levels, and we remove the cases where we are sentencing a portion of the population to economic "death".

> Assuming an income distribution like what we have in reality, this means that a certain percentage of our population will have so little income that the fine will ruin their life, making them less effective and thus our population less effective. And there's no way we can remove this by adjusting the price of our constant fine. If we remove the fine, then everyone speeds. Even at the best sweet spot, we'll have a system where some people will always speed, and some people will never rationally choose to speed but will be economically "killed" by the fine anyway.

We already have a system for this, which is that the fine for speeding scales with speed. Then someone who can't afford the fine can drive more conservatively, so that if they make a mistake the degree to which they violate the rule is smaller, which reduces both the probability of enforcement and the amount of the fine.

Having at least that level of fine is inherently necessary, even for lower income people, because otherwise there is insufficient disincentive for them to speed and there is no compensation to society in the form of a proportionate fine when they do.

We can let a rich person get a thousand small speeding fines because taking their money and using it for lead abatement or cancer research saves more lives than they're risking. But we can't let anyone take that risk without "paying for it" or the net result is a very big social loss, multiplied by every person in that category who longer has any incentive not to do it.

Moreover, talking about "economic death" over a matter of something like a $250 fine is an exaggeration. Even for someone making the federal minimum wage, that's less than 2% of their income. That amount of money doesn't make the difference between whether anybody files for bankruptcy or not, it only makes the difference between whether it happens this month or next. And if you want to help those people, don't waive their traffic fines, just take all the money you would have waived in traffic fines and give it to lower income people regardless of whether or not they violated a traffic law or not -- so that you're helping them but not giving them incentive to misbehave.

>By scaling price with actor income, we are able to maintain a similar relative (dis)incentive across income levels

This is manifestly untrue, as I showed above.

If you're concerned over extremely poor people being unable to pay the cost, you can waive that or subsidize it. That's far from sufficient to justify scaling.

It's unnecessary to set a fine so high that the person doing it would "pay back" the harm to society on average if they did it. You merely have to set a fine so high that it deters people from doing it.

Let's say speeding causes a harm of 500 dollars, and there's a 10% chance of getting caught. Then you would put the fine at 5000 dollars. However, it might be the case that a 500 dollar fine (with an expected payment of 50 dollars) is already enough to stop everyone from doing it, since nobody likes speeding so much that they would pay 50 dollars for it on average. In that case, setting a 5000 dollar fine would just be overkill, and it could hardly be called efficient.

Moreover, your answer assumes that utility can always be measured solely in terms of money. If we measure the utility of society in terms of the number of people speeding (lower is better), then no amount of money can compensate for an increase in the number of people speeding. Then the answer would be to set the fine such that the number of people who choose to speed is the lowest, and does not involve the "expected harm" to society at all.

Even if you do assume that there is a conversion factor between "number of speeders" and "money", then it might still be sufficient to set the fine at a much lower number than you would get using your formula. You cannot just take into account the utility of the society, you also have to take into account the preferences of individuals (which guide their actions).

This can also be used to justify individual fines: if a 100 dollar fine is enough to stop you from speeding, and a 200 dollar fine is necessary to stop someone else from doing it, then why should I set the fine for both at 200 dollars? How can this be called efficient? You could argue it's more fair, but that's more a question of what's moral and has little to do with simple calculations, which you seem to be advocating for.

Yes, if for whatever reason nobody values an activity over the fine my formula produces, then any amount in between will be equally efficient: in your example any fine above $500 is equally efficient. But note that nobody ever pays the fine! In the real world, someone ends up paying the fine, it is not the case that fines deter everyone. So your example isn't reality.

>Moreover, your answer assumes that utility can always be measured solely in terms of money. If we measure the utility of society in terms of the number of people speeding (lower is better), then no amount of money can compensate for an increase in the number of people speeding. Then the answer would be to set the fine such that the number of people who choose to speed is the lowest, and does not involve the "expected harm" to society at all.

Sure, if your goal is prevent speeding at any cost then you should set the fine to be infinite. Or rather, set it at max wealth (since above that can't be collected) and pour all your policing resources into detection. Obviously, this also doesn't reflect reality.

>This can also be used to justify individual fines: if a 100 dollar fine is enough to stop you from speeding, and a 200 dollar fine is necessary to stop someone else from doing it, then why should I set the fine for both at 200 dollars? How can this be called efficient?

Again, it depends on the goals. In my framework the goal is to prevent people from doing something that harms society if and only if the benefit they get from it is less than the societal harm. Setting the fine equal to the harm (modulo probability) does that. If you charge some people more than this number, then they'll be deterred away from the action even when it would be efficient to do it. Conversely if some people are charged less.

> It doesn't vary based on how wealthy the speeder is...Pigovian taxes should be constant.

Speeding is not a market activity and a speeding ticket is not a tax. Speeding is either a misdemeanour or crime, that means it is simply prohibited. Period.

The state of affairs you refer to, where the speeding ticket is considered just a cost of doing said activity is exactly what we want to avoid, and income-based speeding tickets are one mechanism that does this.

The purpose of a speeding ticket is to (a) punish and (b) deter. Both essentially don't work on rich people if they are too low, as you amply demonstrated, because they will consider this just a tax or similar minor nuisance. On the other hand, the fine that would actually deter a rich person from speeding might bankrupt a less wealthy individual and would therefore be disproportionately heavy.

>Speeding is either a misdemeanour or crime, that means it is simply prohibited. Period.

Why not set the fine to a million dollars for everyone, then, or at least significantly boost the fine? Under my framework it's easy to answer, since it's inefficient to disincentivize speeding that much.

>The state of affairs you refer to, where the speeding ticket is considered just a cost of doing said activity is exactly what we want to avoid

Why?

>Punish

What is the benefit of punishment outside of deterrence? And for deterrence, the clear economic answer is to have the same amount of deterrence for everyone, which requires a constant fine.