Drivers, hold on to your wallets

A new study confirms what many have believed. When local government experiences a drop in revenue, traffic citations increase. The correlation was confirmed thanks to the work of Thomas Garrett of the St. Louis Fed and Gary Wagner of U Arkansas/Little Rock. 

They studied 14 years of traffic citation data in North Carolina. They noticed that "a one percentage point decrease in last year's local government revenue results in roughly a 0.32 percentage point increase in the number of traffic tickets in the following year." 

It's well known that municipalities throughout the US are experiencing a revenue shortfall, thanks to the triple whammy of falling asset prices and the corresponding property tax revenue reduction, increased demand for social services, and as businesses fail, reduced corporate tax revenue. It will be interesting to see the response of the citizenry if the correlation is too closely linked. 

Hat tip [Innovations Report]