Incentives matter: red-light camera file

We learn from this article at the msnbc website that red-light cameras, installed for "safety reasons", but which also just happen to to increase ticket revenues for the city authorities, since they record those who run red lights and issue fines automatically, are in fact bringing city revenues down. Since drivers at those intersections monitored by cameras learn not to run red lights they reduce ticket revenues. Naturally, city authorities are upset and are planning to remove the cameras.

But not running red lights at least looks good from a safely point of view, if not for revenues. But even this is not so clear cut. The law of unintended consequences comes into play. As the article says,

In Lubbock, Texas, the City Council shut down all its cameras last month, citing a report that showed statistically significant increases in rear-end collisions at intersections, including those with cameras.

Rear-end collisions, in fact, have been cited in numerous reports and lawsuits questioning the benefits of red light cameras. Opponents claim that the cameras actually create more hazardous conditions.

“When people know there’s a red light camera, they change their driving behavior, and they slam on their brakes trying to avoid a ticket,” said Tom McCarey, an activist for the National Motorists Association.

Image it, people changing their behaviour when you change the incentives they face, who would have thought?

But even this isn't the end of the story. While rear-end collisions go up, right-angle collisions — "T-bone crashes," when a car comes across the intersection and hits you from the side — go down. But a study by the Federal Highway Administration in the US argues that overall red light cameras led to no real change in the number of accidents and they reduce the number of people hurt in those accidents by just less than 5 percent. The msnbc article states,

The FHA concluded that cameras provide, at best, a “modest aggregate crash-cost benefit.”

So red light cameras provide no real safety benefits but do provide revenues ... until drivers change their behaviour.

(HT: Peter Klein at Organizations and Markets)