Point-record driving licence and road safety: An economic approach

Many countries now issue driving licences where traffic violations are recorded through a point system, even though implementation varies among countries and even within a country. Depriving offenders of their licence is a non-monetary sanction that allows the government to incapacitate dangerous individuals and that also deters most drivers from infringing the law. We investigate the desirable features of point-record licence mechanisms and, in particular, whether drivers should be allowed to redeem points and/or be given a probationary period. We also analyze the complementarity of point-record mechanisms and fines and consider the possibility of an immediate withdrawal of the driving licence for very serious offenses.