Speed Trap or Poverty Trap? Fines, Fees, and Financial Wellbeing

Steven Mello’s research paper investigates the effects of traffic fines on financial wellbeing by studying the correlation between Florida traffic citation records (between 2011 and 2015) and credit reports and payroll data of ticketed drivers. Following Mello’s explanation of his methodology, he discusses the collateral consequences of driver’s license suspension. 

You can read the full text of the paper here. 

Key findings

• Many U.S. households are unprepared to cover an unexpected expense as nominal as a $175 traffic ticket.
• “Traffic tickets appear to have a multiplying effect on financial health for poor drivers, who exhibit increases in financial distress observationally similar to a $950 income loss following a $175 ticket.”
• “If governments set optimal enforcement without taking into account the compounding welfare effects of fines, they will tend to over-police.”
• Fines cause “the most significant declines in financial wellbeing” for people who already have unpaid bills compared to individuals who are more financially stable.