We all have to pay our bills sooner or later as well as our fines and taxes. We can’t avoid that, it’s one of the certainties of life. However, we can change how we feel about paying our fines and taxes. We can use our own human flaws to pay on time and feel less aversion to paying.
Golden Behaviors
– Nudges for a Healthy Lifestyle –
Reading time: 5 minutes
Yesterday I found a white and purple envelope in my mailbox. That caused a slightly increased heart rate when I took it out of the mailbox, because it meant I just received a fine for a traffic violation. Unfortunately, this has happened in the past, and always because I violated the speed limit. I quickly opened the envelope to see by how much. As it turned out, I had exceeded the speed limit by four kilometers per hour, so that resulted in a fine of €31 to be paid within 2 months.
My reaction was a composition of relief and reluctancy; relief that the fine wasn’t higher and reluctancy to part with my money. To deal with this reluctancy, I was tempted to add the envelope to a growing pile of envelopes that need to be handled somewhere in the future. From the nine million traffic fines in The Netherlands each year, about 1.4 million envelopes remain in such piles unpaid until at least the first reminder with an increase of the fine (Eshuis, 2020). If you are like me, the reluctancy to deal with the fine immediately – and postpone paying to a later moment – can cause you to forget about paying the fine on time and end up with an even higher fine.
Traffic fines are introduced to influence our behavior and increase overall safety for road users. But what is the effectiveness of traffic fines and what are the requirements?
Effectiveness of traffic fines
According to deterrence theory, a sufficiently high chance of detection of a violation and a sufficiently high penalty will deter road users from committing traffic violations. Deterrence theory claims that criminal penalties do not just punish violators, but also discourage other people from committing similar offenses. The Norwegian researcher Rune Elvik conducted a meta-analysis indicating that fine increases of up to 50% do not influence violations; fine increases between 50% and 100% are associated with a 15% decrease in violations; and that fine increases over 100% are associated with a 4% increase in violations and thus tended to be counterproductive. Furthermore, the effects of fine increases mainly seem to affect the group of light offenders, the more severe and frequent offenders do not seem to be influenced by fine increases.
Most of these studies looked at the effect immediately after a change in fines and at places with high enforcement levels. Fine increases of less than 50% apparently do not seem to generate enough salience to have light offenders reduce their speeding. Fine increases between 50% and 100% do lead us to reduce speeding, but probably only during the time to get used to the new fine. After we have received one or two speeding tickets, we have adjusted to the new fine, and the increase become less salient to us. Thus, it seems that the effects of increasing fines wane over time.
Postponing your payments to diminish feelings of loss
Most people have a reluctancy to pay their fines, because we do not like to part from our money. We falsely hope that postponing the payment will somehow make it less painful. As I wrote in a previous blog, present bias leads people to disproportionally overvalue immediate rewards, while assigning less value to long-term consequences. When translated to fines and taxes: people disproportionally overvalue immediate payments, while assigning less value to long-term payments.
We seem to hope implicitly that present bias will lead us to be less reluctant in the future by postponing payments. But although the initial disappointment of having to pay a fine may have faded, the fine remains €31: I had to pay €31 on the day I opened the envelope from the CJIB and a month later I still had to pay €31. Postponing the decision usually does not lead to a diminished feeling of loss. To be able to use present bias to your advantage, you really have to turn your payment to a long term payment.
How to deal with the reluctancy for paying your fines and taxes
What could work effectively in reducing your feelings of loss, is changing the way you pay your fines and turning them into long term payments. You can do this by scheduling the payment of your fine – a feature of any mobile banking app. As soon as I opened the envelope, I scheduled a future payment of €31 to be paid in seven weeks. That is well ahead of the two months deadline. This allows me to optimally benefit from the effects of present bias. I do not have to pay right now, and so I do not experience the immediate loss. I schedule the payment for 7 weeks from now, which from my current standpoint feels less painful than an immediate loss. You can use this for all your payments. This will allow you to diminish aversion when paying your fines, but also your taxes, credit card payments, dog walking service, and gym subscription.
Happy driving and stick to the speed limit: better to avoid fines altogether than reducing the pain of paying them.
How to Diminish Aversion To Paying Your Fines and Taxes Click To TweetNiels Vink (1975) is author of Golden Behaviors and behavioral designer. He uses insights from the behavioral sciences to explain why people often act against their own interests. As a behavioral expert, he explores how you can nudge your behavior for a healthy lifestyle. He has Master degrees in Social Psychology (Leiden University) and Industrial Design Engineering (Delft University of Technology) and holds a PhD in Consumer Behavior.
When you have been inspired to start and maintain your Golden Behaviors, reach out to me.