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Some rough calculations indicate that expected penalty of driving without a license is small in Norway. The penalty of being caught for such an offence is a fine amounting to 3000 Nkr. The probability of being caught is hard to estimate, but it is likely far less than the probability of being caught speeding because driving without a license can not be

Assumed

Assumed

Resulting

Resulting Q-

Resulting

Resulting

values of P0

values of d

a-values

values (Nkr)

λ - values

(λd) - values

d = 0.10

a = 10000

Q = 0.94

λ=

7.0

(λd) =

0.70

P0= 1.00 Nkr

d = 0.20

a = 10000

Q = 0.98

λ=

4.0

(λd) =

0.80

(lower limit)

d = 0.30

a = 10000

Q = 1.02

λ=

2.9

(λd) =

0.87

d = 0.40

a = 10000

Q = 1.07

λ=

2.4

(λd) =

0.96

d = 0.50

a = 10000

Q = 1.11

λ=

2.1

(λd) =

1.05

d = 0.10

a = 10481

Q = 0.93

λ=

10.0

(λd) =

1.00*

P0= 1.60 Nkr

d = 0.20

a = 10986

Q = 0.96

λ=

5.8

(λd) =

1.16

d = 0.30

a = 11514

Q = 0.98

λ=

3.9

(λd) =

1.17

(upper limit)

d = 0.40

a = 12068

Q = 1.01

λ=

3.1

(λd) =

1.24

d = 0.50

a = 12649

Q = 1.02

λ=

2.6

(λd) =

1.30

Average values of Q, λ and (λd)

QA = 1.00

λ A = 4.4

(λd)A = 1.03

Table 2. Estimated values of extra costs per km with loss of driving license and estimated ratios between car driving elasticities with respect to car usage costs within

12 months and 24 months.

noticed from driving behaviour. The latter probability is estimated to about8.0 105 per km on Norwegian roads outside automatic control zones (Jørgensen and Pedersen, 2005) in 1997. Consequently, a maximum value of expected penalty cost per km of driving

* I t c a n b e d e d u c e d f r o m ( 2 ) t h a t w h e n ( λ d ) 1 f o l l o w s : ) 1 l n ( l i m 0 2 4 P Q b W P + =

without a license was 0.24 Nkr (8.0 105 .3000) or 24 % of average estimated value of Q. in Table 2.

Combining information from the Norwegian insurance companies and Central Bureau of Statistics in Norway the probability of being involved in an accident on Norwegian roads

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