Executive Summary

Every year there are around 20,000 Australians has to replace their passports early due to

lost or being stolen. This might create security threat to Australia. Therefore, APO aimed to:

1. Decrease the chance of passports lost/stolen

2. Increase timely reporting of lost/stolen passport

Summary of literatures:

Gneezy and Rustichini (2000) found a steady increase number of late-arrivals in fine day-

care centre compared to control group (no fine).

Kurz, Thomas and Fonseca (2014) found participants in retributive group were less likely

to be late. However, there was no difference between compensatory and control conditions.

Evidence showed frame does matter.

Friedland (1982) found whether the fine information is precise or vague, people declared

on average the high proportion of their income if the fine is big. Evidence showed the fine size

does matter.

Choo, Fonseca and Myles (2015) found participants were more likely to declare their

income with larger fine in a real-effort task.

Aim:

To investigate whether the effect of fining loss/stolen of passport on participants’

attitudes towards passport care and their timely reporting of a passport stolen would depend on

the fine framing and fine size.

 Results

H1: Retributive > Compensatory

The hypothesis was supported. Positive effects under the retributive condition or retributive

framing than compensatory condition were found.

H2: Large > Small / Absent.

This hypothesis was not supported. The fine size had no effect in passport care.

H3: Retributive > Compensatory.

This hypothesis was not supported. No evidence that framing had an effect on timely reporting.

H4: Absent / Small > Large.

This hypothesis was not supported. No evidence showed that fine size had an impact on the

timely reporting participants’ attitudes or intentions.

Limitation

Selection of participants: Students may have difficulty to afford themselves for travelling

frequently. As a result, they have less chance to experience passport lost/stolen.

Recommendations

1. Rewording the current frame of fine into retribution .

2. Refrain to increase fee.

3. Recruit frequent traveler for participants so that a better data could be obtained.
 Background

Every year there are around 20,000 Australians has to replace their passports early due to

lost or being stolen. It may create security threat to Australia. They might be used illegally in

term by identity, but also in term of people being able to travel into Australia. The worth of

Australian passports is about $10k on black market.

Therefore, APO aimed to:

1. Decrease the chance of passports lost/stolen

2. Increase timely reporting of lost/stolen passport

 Since lots of passport lost or stolen each year, APO decided to instituted fine to

incentivize passport care. If Australians replace the passports early due to passport lost/stolen,

they will have to pay the standard fee of $254 with an additional fine of $111. So it is $365

altogether. When the number replacements increase, the fine would also increase (figure 1).

Currently, fine is framed compensatorily.

Figure 1. Amount of fine for different number replacement

Each year APO will made about an extra 5 million dollar on the basis of fine. However it

had absolutely no effect on the number of lost/stolen passport. It might due to the fine size and

its framing.

1. Having the fine may discourage people from reporting because they may want “to

have another look” (delay reporting).

2. The way in which the fine is framed may do matters. The framing of the fine may not

be framed appropriately.
Why timely reporting may reduce contingencies?

1. When the fine is applied, people might refuse to report immediately due to expensive

fine. They might not be able to afford the fine.

2. It might have no impact that when people were just having a fine due to lost of passport.

However, there is no evidence for these reasons currently. Therefore, it is important to

investigate them to this possibility.

Aims

To investigate whether the effect of fining loss/stolen of passport on participants’ attitudes

towards passport care and their timely reporting of a passport stolen would depend on the fine

framing and fine size.

Concepts

Deterrence hypothesis: People decide to obey or violate rules through changes in costs or benefits.

Compensation: Reward or payment for services performed, typically money.

Retribution: Punishment for immoral or criminal act.

Literatures

Gneezy and Rustichini (2000) investigated the deterrence hypothesis by introducing a

fine late-arrival parents. None of the day-care centre has had a fine for late pick up previously

but they introduced a small fine for the half of the day-care center. The fine was NIS10

(=US$3.30). They would want to investigate if the rate of late pick-up across the fine day-care

centre and the control day-care centre. They found a steady and substantial increase number of

late-arrivals in fine day-care centre (figure 2).

Figure 2. Average number of late-arrival parents, per week.

The fine did not work may due to, firstly, parents treat it as a fair game. Just by having a

fine, it changed the meaning of being late. Parents might be willing to pay extra because

someone has to stay back to look after their child. Secondly, it was a less harsh penalty. It sent a

signal that it is not a matter to be late. Findings suggested that fine size can be very important for

how people response to fine.

 Kurz, Thomas and Fonseca (2014) investigated the importance of the fine’s moral

meaning. Participants were told that they would be fined if they were late. The fine’s framing

was presented as compensatory (price) or retributive (punishment for immoral behavior) and

were compared with control condition (no fine). Results showed that those in retributive group

were less likely to be late. However, there was no difference between compensatory and control

conditions (figure 3).

Figure 3. Percent of being late in each condition

Findings suggested that fining people where people understand this is compensation did

not change their behavior. Retributive condition was effective because it encouraged them to

think about their behavior were immoral.

In second study, participants were asked to rate the level of moral transgression for late

turn up. Results indicated that participants rated turning up late as being worse in retributive

condition than in compensatory condition (figure 4).

 Figure 4. Rating on moral transgression

This result suggested that when framing a fine as compensation for behavior, it seems to

diminish the idea that behavior is actually a bad thing to do. This showed that behavior changed

when it was framed as retributive rather than compensatory.

 Friedland (1982) investigated the effect of probability of tax evasion detection and fine

size on participants’ tax evasion behaviour. Participants received salaries and were asked to

decide how much of that salary they want to report to pay the corresponding tax. They were then

told that the study varied the chance of audit (high or low), the fine size (high or low) and the

preciseness of the information. Results showed on average, most participants were under

declaring their amount. These suggested people are taking the advantage of the fact that they

could make money by lie that how much they earned. Moreover, the effect of fine size showed

whether the fine information is precise or vague, people declared on average the high proportion

of their income if the fine is big (figure 5). Therefore, evidences showed fine size does matter.

Figure 5. Percentage Declared Income

 Choo, Fonseca and Myles (2015) conducted a similar experiment. Result indicated that

participants were more likely to declare their income with larger fine in a real-effort task (figure

6).

Figure 6. Average Compliance Rate

Literatures above showed evidences that fines work better when:

1. It was framed retributively rather than compensatorily.

2. The fines are big.

Therefore, current project aimed to investigate whether the effect of fining the loss/stolen

of a passport on participants’ attitudes towards passport care and their timely reporting of a

passport stolen would depend on the fine framing and fine size.

Hypotheses

Based on the previous studies, there were four hypotheses altogether. H1 and H2 related

to positive relationship with passport care. H3 and H4 related to positive relationship with timely

reporting.

H1: Retributive > Compensatory

It was expected that participants would report more positive attitudes toward taking care of their

passport where the fines were framed as retributive (punishment for immoral act) rather than as

compensation (price).

H2: Large > Small / Absent.

Participants should report more positive attitudes toward passport care when the fines are large

rather than small or no fine. Bigger fines should be more effective in changing attitudes.
 H3: Retributive > Compensatory.

Participants would have more positive attitudes towards reporting a lost or stolen passport

in a timely way if the fines are framed as retributive rather than compensatory.

H4: Absent / Small > Large.

Participants would be more likely to be willing to report the timely way when there is not

fine or small fine.

 Project Method

Design

2 (framing: compensatory or retributive) X 3 (size: no fine, small fine or large fine) between

subjects design (ANOVA).

Frame Manipulation: (Compensatory vs Retributive)

Figure 7 showed compensatory framing. Replace a lost or stolen passport associated with

the increase of workload and costs on APO.

Figure 7. Compensatory framing for lost/stolen passport

 Figure 8 showed retributive framing. Lost or stolen passport will create security threat on

security to Australian because terrorists and other criminals may travel to the country easier.
Figure 8. Retribution framing for lost/stolen passport
Size Manipulation: absent, small fine and large fine

For all conditions, the passport is valid for 10 years. It costs $254 to get a new passport or

renew an existing one. However, the fine for replacing a lost or stolen passport is different in

each condition (table 1 and Figure 9).

Table 1

Amount of fine for replacing a lost/stolen passport in each condition

Conditions of fine Amount for replacing a lost or stolen passport

Absent $254

Small $254+$111=$365

Large $254+$333=$587
 Figure 9. Fines in absent, small fine and large fine condition

Manipulation check

First manipulation was the attention check. Participants were asked to response two

questions regarding the reason and costs of replacing a lost/stolen passport (figure 10).
Figure 10. Manipulation check for reason and costs of replacing a lost/stolen passport

Second manipulation checked if the manipulation of the framing and fine size have an

impact on the perception that was expected to. Three items which measure the participants’

perception on whether the size and total fee was affordable, security threat and whether the fine

size was unfair were shown in Figure 11 (1=disagree, 7=agree).

 Fee Unfair
Figure 11. Manipulation check on affordability, security threat and fee fairness

Measure of Passport care attitudes and intentions (1=disagree, 7=agree)

The moral scale measured participants’ perception on whether taking care of their

passport is moral. The care intent question was about the participants’ intention to take care of

their passport (Figure 12).

Care Intent
Figure 12. Measure of passport care attitudes and intentions

Measure of Passport reporting attitudes and intentions (1=disagree, 7=agree)

 The report modal scale measured whether or not time reporting is moral. The report intent

question was about the intention of report the time (figure 13).

Report Intent
Figure 13. Measure of passport care attitudes and intentions

Manipulation check and care as well as reporting attitude items have 3 to 4 questions

while intention items were single item. There was no reverse question provided.

Sample Characteristic and Demographics

Figure 14. Demographics information

A total of 205 undergraduate students from University of Queensland completed the

survey including demographic information (see figure 14) during lecturer. 176 students

(M=21.56, SD=4.18; Did Not Say=4) passed comprehension questions while 29 students failed

so they were excluded. The details were shown below. Table 2 showed that participants spread

evenly across each condition.

 Sex Nationalit

Males 46 y

Female 130 Australian 135

Others 41

Number of Passport

holder

AUS passport 123

Non-holders 53

Number of travel

At least annually 90

Less than annually 85

Did Not Say 1

Table 2

Participants spread evenly across each condition

Frame No Fine Small Fine Large Fine

Compensatory 33 33 26

Retribution 29 30 25
 Procedure

Initial manipulation included questions regarding reason and costs of replacing a

lost/stolen passport and the perception of size and total fee on affordability, security threat, and

fairness. Participants were told that fine was either framed compensatory or retributively for

social threat. They were then told that fine to reporting a lost/stolen passport was no fine, small

fine ($111) or large fine ($333). Participants’ feeling on the perception of fairness and morality

were measured. They were also asked about their intention of reporting a lost/stolen passport.

Project Results

Scale construction

Cronbach’s alpha was used to check the reliability for any measure that had more than

one items. Therefore, manipulation check and care as well as reporting attitude items were turned

into scales while the intention items remained as single item measures. Results showed that all of

them were acceptable since the alphas >.70 (Table 3).

Table 3

Cronbach’s alpha for each scale

Items Cronbach’s alpha (α)

Fee Affordable 0.77

Security Threat 0.95

Fee Unfair 0.89

Care Moral 0.78

Report Moral 0.85

 It can then be averaged across all items associated with each scale to get dependent

variables. As a result, there were:

3 scales that directly related to manipulation: Fee Affordable, Security Threat, Fee Unfair

2 scales measure attitudes: Moral Care, Moral Report

2 items measure intentions: Care Intent, Report Intent.

Descriptive statistic for the manipulation measures (Table 4)

Table 4

Descriptive statistic for the manipulation measures

DV Mean SD

Fee is Affordable 2.39 1.17

Security Threat 4.72 1.51

Fee is Unfair 3.42 1.45

These indicated that mean for affordability was considered low. No matter how much is

the fine, people perceived that it was not affordable. Moreover, on average, people seem to

understand that having passport lost or stolen would create threat to Australia’s security.

Furthermore, people did not agree that the fee is necessarily unfair.
 DV Mean SD

Passport Care is Moral 5.36 0.98

Intention to Care 5.12 1.62

Timely Reporting is Moral 4.58 1.33

Descriptive statistic
Intention to Report 3.89 1.96
for the passport

attitudes and intentions (Table 5)

Table 5

Descriptive statistic for the passport attitudes and intentions

People do think that taking care of passport is a moral thing. Intention care is somewhat

less positive than moral care even though the scale is different for each. This interpreted that

people are less positive than believe about something being moral. Timely reporting believe was
less positive than both passport and intention care believe. Also, the standard deviations for the

intention items were large which indicated participants’ disagreement across people about how

they would behave.

Table 6

Findings for Fee Affordable

Fee Affordable (M=2.40, SD=1.17)

Compensation mean No fine 2.55(1.11)

Small 2.67(1.17)

Large 1.78(0.94)

Total 2.37(1.14)

Retribution mean No
2.97(1.29)
fine
2.39(1.17)
Small
1.81(0.86)
Large
2.42(1.21)
Total

Frame F(1,170) 0.12

P value for frame 0.73

 size F(2,170) 11.08

P value for size <.001*

interaction F(2,170) 1.54

P value for interaction 0.22

Note. * showed number in three decimal places.

In table 6, there was no significant main effect on framing on people perception that the

fee is affordable as well as the interaction. However, there was significant main effect on the

size. Based on figure 15, the broad pattern showed the fee for no fine and small fine were more

affordable than large fine. The affordability is clear in retribution condition but unclear in

compensation condition as the affordability for the no fine and small fine was about the same.

People were less sensitive to the fine size in compensation condition. It was manipulated that

afford perception of affordability associated with the fine size effectively. Overall, from the

averages, people were credibly unaffordable and not responding well to the fine size.
 No Fine
7 Small Fine
Big Fine
6
Greater Affordability -->

1
Compensation Retribution

Figure 15. Figure of fee affordable

Table 7

Findings for Security Threat

Security Threat (M=4.72, SD=1.51)

Compensation mean No fine 4.26(1.63)

Small 4.29(1.68)

Large 4.74(0.83)

Total 4.41(1.47)

Retribution mean No
5.33(1.60)
fine
4.73(1.50)
Small
5.12(1.35)
Large
5.06(1.50)
Total

Frame F(1,170) 7.86

P value for frame 0.006*

size F(2,170) 1.21

P value for size 0.30

interaction F(2,170) 1.00

P value for interaction 0.37

Note. * showed number in three decimal places.

 In table 7, there was a significant main effect on framing on whether or not people

perceived that having passport lost or stolen threat the security. However, the fine size and the

interaction were not significant. The broad pattern showed people have some general awareness

on perception of the security threat. They do understand that losing a passport can threaten

national security.

No Fine
Small Fine
Big Fine
7

6
Greater Fairness -->

1
Compensation Retribution

Figure 16. Figure of security threat

Table 8

Findings for Fee Unfair

Fee Unfair (M=3.42, SD=1.45)

Compensation mean No fine 2.85(1.47)

Small 3.44(1.43)

Large 3.92(1.48)

Total 3.37(1.51)

Retribution mean No
3.34(1.52)
fine
3.56(1.32)
Small
3.55(1.34)
Large
3.48(1.38)
Total

Frame F(1,170) 0.13

P value for frame 0.72

size F(2,170) 2.92

P value for size 0.057*

interaction F(2,170) 1.30

P value for interaction 0.028*

Note. * showed number in three decimal places.

In table 8, there was not a significant main effect on framing on whether or not the fee is

unfair. There was a marginal effect on the fine size. However, the interaction was not significant.

There seems to be a linear relationship between the fine size and perception on how unfair it is in
compensation condition (figure 17). When the fine was bigger, it was more unfair. However,

there was no relationship between the fine size and unfairness in the retribution condition.

5
Fee Unfair -->

No Fine
4
Small Fine
Big Fine
3

1
Compensation Retribution

Figure 17. Figure of fee unfair

Table 9

Findings for Care Moral, Care Intentions, Report Moral and Report Intentions

Care Care Report Report

Moral Intentions Moral Intentions

M=5.36 M=5.12, M=4.58 M=3.89

SD=0.98 SD=1.62 SD=1.33 SD=1.96

Compensation mean No fine 5.28(0.76) 4.68(1.74) 4.40(1.31) 3.30(2.04)

Small 5.17(1.07) 5.27(1.53) 4.61(1.23) 3.88(2.17)

Large 5.54(1.03) 5.19(1.63) 4.75(1.25) 3.85(1.64)

Total 5.32(0.96) 5.03(1.640 4.57(1.26) 3.66(1.98)

Retribution mean No fine 5.47(1.00) 5.46(1.14) 4.55(1.45) 3.93(1.72)

Small 5.20(1.12) 5.28(1.83) 4.69(1.39) 4.43(2.11)

Large 5.56(0.89) 4.84(1.77) 4.54(1.43) 4.04(1.95)

Total 5.40(1.01) 5.21(1.61) 4.60(1.41) 4.14(1.93)

Frame F(1,170) 0.29 0.35 0.00 2.36

P value for frame 0.59 0.56 0.96 0.13

size F(2,170) 1.92 0.39 0.34 1.17

P value for size 0.15 0.68 0.71 0.31

interaction F(2,170) 0.15 1.80 0.29 0.19

P value for interaction 0.86 0.17 0.75 0.83

 In table 9, there was non-significant main effect on framing on the perception of taking

care of passport is moral. The fine size and the interaction were also not significant. Results

suggested it did not seem that manipulating either the framing or the fine size change people’s

perception of taking care of their passport is moral.

Besides, there were non-significant main effect on frame, fine size and interaction for

passport care intent. For no fine condition, people in retribution condition indicated that they

were more willing to look after their passport than in compensation condition. Although there

were no significant results found, it may still suggest that framing in retribution condition was

more effective to get people to engage in passport care behaviour.

On the other hand, there were no significant results on frame, fine size and interaction for

timely report moral. Changing people perception on framing and fine size had nothing to do with

people perception of reporting a lost/stolen passport in a timely way is moral.

Furthermore, there were no significant results on frame, fine size and interaction for

timely report intent. In each case, for a given size of fine in the retribution condition, the mean is

higher than the compensation condition. Although the results were not significant, participants’

intention might be more strongly in retribution condition if there was a more powerful test.
 Discussion

H1: Retributive > Compensatory

This hypothesis was supported. Results indicated more positive effects under the

retributive condition or retributive framing than compensatory condition. Also, framing did

successfully in manipulating security concerns, even though security concerns were reasonably

high even in compensatory condition. Furthermore, in retribution condition, security concerns

were found to be correlated with higher affordability and lower fairness. By bringing in that,

framing did change the way which people decided whether or not the fine is fair. However, there

was no evidence showed the perceptions that participants were more willing to take care of their

passport is moral was affected by retributive frame. Moreover, there was significant evidence

that retribution condition improved the care intentions under no fine.

H2: Large > Small / Absent.

This hypothesis was not supported. Results showed when the fine size was large,

participants in compensation condition perceived that fines were less affordable and less fair.

However, the fine size had no further effect in changing attitudes or behavioural intentions.

H3: Retributive > Compensatory.

This hypothesis was not supported. Results showed no evidence that framing had an

effect on timely reporting.

H4: Absent / Small > Large.

This hypothesis was not supported. No evidence showed that fine size had an impact on

the timely reporting participants’ attitudes or intentions.

Limitation

First, the selection of participants might affect the final result. Since participants were

students, they might have difficulty to afford themselves for travelling frequently. As a result,

they have less chance to experience passport lost/stolen.

Recommendations

Results showed fine size had no effect on passport care but framing did change people’s

behavior. Thus, rewording the current frame of fine into retribution may help their attitudes and

intentions toward passport care to decrease the number of lost/stolen passport. Furthermore, there

is no point to increase the fine as people might choose delay reporting due to the expensive fee.

Instead, made the fee affordable would help to increase timely reporting. Moreover, it is

recommended to recruit frequent traveler for participants so that a better data could be obtained.
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