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Product and Occupational Liability

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  • W. Kip Viscusi

Abstract

Increased liability for risks posed by jobs and products has transformed the cost structure of job and product markets. Liability costs used to be an incidental expense; now they are a factor of substantial economic consequence. The costs associated with a more active economic role of liability are not necessarily undesirable. However, examination of the economic objectives of the liability system will indicate that the current structure is not ideal. Perhaps the most noteworthy feature of the emerging role of liability is that it has been contemporaneous with an expansion in governmental risk regulation. The subsequent sections explore the performance of product and occupational liability with respect to the objectives of efficient deterrence and insurance, in the context of seeking an optimal mix between legal and regulatory institutions.

Suggested Citation

  • W. Kip Viscusi, 1991. "Product and Occupational Liability," Journal of Economic Perspectives, American Economic Association, vol. 5(3), pages 71-91, Summer.
    • Handle: RePEc:aea:jecper:v:5:y:1991:i:3:p:71-91
    Note: DOI: 10.1257/jep.5.3.71
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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.5.3.71
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    References listed on IDEAS

    as
    1. Viscusi, W Kip & Hersch, Joni, 1990. "The Market Response to Product Safety Litigation," Journal of Regulatory Economics, Springer, vol. 2(3), pages 215-230, September.
    2. Meyer, Bruce D & Viscusi, W Kip & Durbin, David L, 1995. "Workers' Compensation and Injury Duration: Evidence from a Natural Experiment," American Economic Review, American Economic Association, vol. 85(3), pages 322-340, June.
    3. Viscusi, W Kip & Moore, Michael J, 1987. "Workers' Compensation: Wage Effects, Benefit Inadequacies, and the Value of Health Losses," The Review of Economics and Statistics, MIT Press, vol. 69(2), pages 249-261, May.
    4. Broder, Ivy E, 1990. "The Cost of Accidental Death: A Capital Market Approach," Journal of Risk and Uncertainty, Springer, vol. 3(1), pages 51-63, March.
    5. Michael J. Moore & W. Kip Viscusi, 1989. "Promoting Safety through Workers' Compensation: The Efficacy and Net Wage Costs of Injury Insurance," RAND Journal of Economics, The RAND Corporation, vol. 20(4), pages 499-515, Winter.
    6. George L. Priest & Benjamin Klein, 1984. "The Selection of Disputes for Litigation," The Journal of Legal Studies, University of Chicago Press, vol. 13(1), pages 1-56, January.
    7. Michael Spence, 1977. "Consumer Misperceptions, Product Failure and Producer Liability," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 44(3), pages 561-572.
    8. Viscusi, W Kip, 1989. "The Interaction between Product Liability and Workers' Compensation as Ex Post Remedies for Workplace Injuries," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 5(1), pages 185-210, Spring.
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    Cited by:

    1. Chantal Toledo & Sofia Berto Villas-Boas, 2019. "Safe or Not? Consumer Responses to Recalls with Traceability," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 41(3), pages 519-541, September.
    2. Joshua Schwartzstein & Andrei Shleifer, 2013. "An Activity-Generating Theory of Regulation," Journal of Law and Economics, University of Chicago Press, vol. 56(1), pages 1-38.
    3. Price V. Fishback & Shawn Everett Kantor, 1994. "Insurance Rationing and the Origins of Workers' Compensation," NBER Working Papers 4943, National Bureau of Economic Research, Inc.
    4. Alberto Cavaliere, 2004. "Product Liability in the European Union: Compensation and Deterrence Issues," European Journal of Law and Economics, Springer, vol. 18(3), pages 299-318, December.
    5. Beatty, Anne & Gron, Anne & Jorgensen, Bjorn, 2005. "Corporate risk management: evidence from product liability," Journal of Financial Intermediation, Elsevier, vol. 14(2), pages 152-178, April.
    6. Lichtenberg, Erik, 1992. "Alternative Approaches To Pesticide Regulation," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 21(2), pages 1-10, October.
    7. Ram Singh, 2002. "Characterization of Efficient Product Liability Rules: When Consumers are Imperfectly Informed," Working papers 110, Centre for Development Economics, Delhi School of Economics.
    8. Ollinger, Michael & Houser, Matthew, 2020. "Ground beef recalls and subsequent food safety performance," Food Policy, Elsevier, vol. 97(C).
    9. Sengupta, Ramprasad & Mandal, Subrata, 2005. "Health damage cost of automotive air pollution: Cost benefit analysis of fuel quality upgradation for Indian cities," Working Papers 05/37, National Institute of Public Finance and Policy.

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    More about this item

    JEL classification:

    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy

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