Essays in tax and penalty design Aaron Payne

Format:

Book

Thesis/Dissertation

Author/Creator:

Payne, Aaron, author.

Contributor:

University of Pennsylvania. Applied Economics., degree granting institution.

Language:

English

Subjects (All):

Finance.

0501.

0511.

0508.

Local Subjects:

Finance.

0501.

0511.

0508.

Genre:

Academic theses

Physical Description:

1 online resource (161 pages)

Contained In:

Dissertations Abstracts International 87-12A

Place of Publication:

Ann Arbor : ProQuest Dissertations and Theses, 2026

Language Note:

English

Summary:

This dissertation evaluates rationales for income-based speeding fines. Such fines are famously applied in Finland, where a $250 offense for a low-income speeder can cost over $100,000 for the rich. Using Finland as our laboratory, we leverage linked administrative data and an original survey to evaluate four leading policy rationales. Chapter 1 evaluates whether income-based fines promote economic efficiency through the lens of the Becker (1968) model. This model can rationalize income-based fines if the marginal social cost of observed speeding behavior is increasing with income. To assess this possibility, we draw on data from accident reports, crime reports, and income-tax returns. We exploit cross-sectional variation in rates of speeding-fine receipt to measure the marginal effect of speeding on accident-related injuries; we then measure the money-metric cost of injuries using an earnings-loss design. Combining these two sets of estimates, we find that the marginal social cost of observed speeding is decreasing with income, leading us to reject the Beckerian rationale. Chapter 2 evaluates redistributive motives for income-based fines through the lens of the Mirrlees (1971) model. In this model, we show that income-based fines can aid redistribution if preferences for speeding are increasing with income. We recover preferences by differencing observed speeding behavior with respect to causal earnings effects on speeding, drawing on data from crime reports, income-tax returns, and inheritance-tax returns. In general, earnings effects consist of a wage-scaled labor supply effect and a standard income effect; we estimate the labor-supply effect using within-individual variation in months-employed. To estimate the income effect, we leverage differences in the timing and size of inheritances shocks. Using our estimates, we find that speeding preferences are negatively correlated with earnings on-average, implying that redistributive motives rationalize a lower fine for the rich. Chapter 3 evaluates two fairness-related motives. In particular, cited rationales for income-based fines indicate key features of the Finnish system-income-proportional fines and equal compliance across incomes-as potentially desirable. We design an original survey to test whether Finns indeed value these features. In particular, survey respondents make hypothetical trade-offs between fixed and income-based speeding fine policies using government revenue, our willingness-to-pay medium. We vary two key elements of the income-based policy across respondents: (1) the "steepness" of the fine schedule and (2) the distribution of speeding behavior it induces. To address confounding redistributive motives, we elicit respondents' WTP for income-based transfers and subtract it from WTP for income-based fines. Net of redistribution, we find that respondents are on-average willing to forgo €144 million of government revenue to implement an income-based policy. However, we find relatively small and insignificant responses to randomized fine-policy characteristics, evidence that is at-odds with our hypothesized fairness rationales. Considering our findings across these chapters jointly, we conclude that income-based fines are difficult to justify: accounting for their popularity requires an appeal to either non-standard economic motives or fairness considerations that are not tied to key observable features of such policies

Notes:

Source: Dissertations Abstracts International, Volume: 87-12, Section: A.

Advisors: Lockwood, Benjamin B.; Rees-Jones, Alex Committee members: Lockwood, Benjamin B.; Kessler, Judd B.

Ph.D. University of Pennsylvania 2026

Vendor supplied data

Local Notes:

School code: 0175

ISBN:

9798247973737

Access Restriction:

Restricted for use by site license