The daycare centers closed at four. Parents were supposed to be there by then. Some weren’t, and each time, a teacher had to stay behind with a child until someone came.
In January 1998, the economists Uri Gneezy and Aldo Rustichini began watching ten private daycare centers in Haifa, Israel, all in the same part of town. For four weeks they only counted: how many times a week a parent arrived late.
In the fifth week, six of the centers put up a notice. Starting next Sunday, it said, every child collected after 4:10 would cost a fine of 10 shekels. That was not a fortune. The authors pointed out that parking illegally in Israel cost 75. But it was not nothing either. The other four centers changed nothing. The teachers were told about the fine, but not about the study.
At the six centers, late pickups went up. Then they kept going up. Before the fine, the centers saw about eight late arrivals a week each. Over the twelve weeks with the fine, the average was roughly double that. The four centers without a fine showed no such change.
At the start of the seventeenth week, the fine was removed, with no explanation. If the fine had caused the lateness, taking it away should have undone it. It didn’t. In the last four weeks of the study, the six centers averaged nearly 19 late arrivals a week each, more than twice the level before the fine.
The researchers offered two possible explanations and said the data could not rule out either. One of them has become the famous one. Before the fine, parents may have seen the teacher who stayed late as doing them a generous favor, and running late as something to feel a little bad about. The fine changed what the act meant. Ten shekels was now the price of a later pickup, and, as the authors put it, no guilt or shame can be attached to buying something at will. The money did not even go to the teacher who stayed. It went to the owner.
They put that idea in the title of the paper. An extra social norm seems to be needed, they wrote: “A fine is a price.” And to explain why lateness stayed high after the fine was gone, they suggested one more: “Once a commodity, always a commodity.”