Abstract
Fines are an extremely common sanction in most Western countries and, in some countries, have become an important source of government revenue. Despite this, the deterrent effectiveness of high fines has received little research attention. This article reports the results of a two-stage least-squares analysis of the specific deterrent effect of high fines on drink-driving offenders in NSW, Australia, in which judicial severity served as the instrumental variable. Despite substantial variation in the fines imposed by magistrates on drink-drivers, no significant deterrent effect from higher fines was found. Various explanations for the failure to observe a deterrent effect are discussed.
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