The Parking Fine Argument
A city council is debating whether to triple the fine for illegal parking from Rs 500 to Rs 1,500. A councilor argues: 'In the neighbouring city, the fine was raised from Rs 500 to Rs 1,500 last year, and the number of parking tickets issued there fell by 40% in the following quarter. If we make the same change, our tickets should fall by about 40% too. Even better, because each ticket will be worth three times as much, fine revenue will rise substantially.' A colleague notes that the neighbouring city also hired 20 new traffic wardens and installed 30 payment machines in the same quarter.
1. Identify the councilor's main unstated assumption and explain why the colleague's note threatens it.
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The councilor assumes that the fine increase caused the 40% drop, and that the neighbouring city's experience will transfer reliably to this city.
The colleague supplies a rival explanation: new wardens and payment machines could have reduced illegal parking or changed how tickets were issued. If those measures caused the drop, the fine may have had little effect. The argument also assumes the two cities are similar in enforcement, driver income, public transport and payment habits - none of which is established. Without controlling for the other changes, the comparison cannot isolate the fine's effect.
2. Test the revenue claim arithmetically. If tickets fall by exactly 40% and every ticket is paid at the new fine, what happens to revenue? At what percentage fall would revenue stay unchanged?
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Let the old number of paid tickets be N and the old fine be F. Old revenue = N × F.
New revenue = 0.6N × 3F = 1.8NF. Revenue rises by 80%, not merely 'substantially' in an unspecified way.
For revenue to stay unchanged: 3F × xN = NF, so x = 1/3. That means tickets must fall to one-third of the old number - a fall of about 66.7%.
Any fall greater than 66.7% reduces revenue. So the councilor's conclusion is arithmetically possible but depends entirely on the size of the behavioural response and on payment compliance.
3. Suppose the council raises the fine and revenue rises, but illegal parking does not fall. Explain how both can be true, and what this implies about using revenue as a success measure.
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Revenue depends on tickets issued and paid, not directly on how often people park illegally. If enforcement intensity stays the same but the fine triples, revenue can triple even with the same violation rate. Revenue can also rise if more drivers pay their tickets rather than ignoring them, or if wardens issue more tickets per shift.
So rising revenue is compatible with unchanged illegal parking. Revenue is therefore a poor measure of deterrence: it may reflect enforcement effort or payment collection rather than behaviour. To judge deterrence, the council would need measured violation rates, ideally compared with a control area and over a period long enough to separate the fine from the new wardens and payment machines.