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Regulation of Health, Safety, and Environmental Risks

In: Handbook of Law and Economics

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  • Viscusi, W. Kip

Abstract

This paper provides a systematic review of the economic analysis of health, safety, and environmental regulations. Although the market failures that give rise to a rationale for intervention are well known, not all market failures imply that market risk levels are too great. Hazard warnings policies often can address informational failures. Some market failures may be exacerbated by government policies, particularly those embodying conservative risk assessment practices. Labor market estimates of the value of statistical life provide a useful reference point for the efficient risk tradeoffs for government regulation. Guided by restrictive legislative mandates, regulatory policies often strike a quite different balance with an inordinately high cost per life saved. The risk-risk analysis methodology enables analysts to assess the net safety implications of policy efforts. Inadequate regulatory enforcement and behavioral responses to regulation may limit their effectiveness, while rising societal wealth will continue to generate greater levels of health and safety.

Suggested Citation

  • Viscusi, W. Kip, 2007. "Regulation of Health, Safety, and Environmental Risks," Handbook of Law and Economics, in: A. Mitchell Polinsky & Steven Shavell (ed.), Handbook of Law and Economics, edition 1, volume 1, chapter 9, pages 591-645, Elsevier.
    • Handle: RePEc:eee:lawchp:1-09
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    Cited by:

    1. Vera Angelova & Olivier Armantier & Giuseppe Attanasi & Yolande Hiriart, 2014. "Relative performance of liability rules: experimental evidence," Theory and Decision, Springer, vol. 77(4), pages 531-556, December.
    2. Hiriart, Yolande & Thomas, Lionel, 2017. "The optimal regulation of a risky monopoly," International Journal of Industrial Organization, Elsevier, vol. 51(C), pages 111-136.
    3. Tomas J. Philipson & Eric Sun, 2008. "Is the Food And Drug Administration Safe And Effective?," Journal of Economic Perspectives, American Economic Association, vol. 22(1), pages 85-102, Winter.
    4. Kovac Mitja & Elkanawati Amira & Gjikolli Vita & Vandenberghe Ann-Sophie, 2020. "The Covid-19 pandemic: collective action and European public policy under stress," Central European Journal of Public Policy, Sciendo, vol. 14(2), pages 47-59, December.
    5. Caskey, Judson & Ozel, N. Bugra, 2017. "Earnings expectations and employee safety," Journal of Accounting and Economics, Elsevier, vol. 63(1), pages 121-141.
    6. Delgado-Cubillo, Pablo & Martín-Román, Ángel L., 2023. "Workers’ behavior after safety regulations: Impact evaluation of the Spanish Occupational Safety and Health Act," MPRA Paper 117284, University Library of Munich, Germany.
    7. Alejandro Donado & Klaus Wälde, 2008. "Trade Unions Go Global!," CESifo Working Paper Series 2368, CESifo.
    8. Nicolas Gravel & Benoît Tarroux, 2015. "Robust normative comparisons of socially risky situations," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 44(2), pages 257-282, February.
    9. Peter Kooreman & Henriëtte Prast, 2010. "What Does Behavioral Economics Mean for Policy? Challenges to Savings and Health Policies in the Netherlands," De Economist, Springer, vol. 158(2), pages 101-122, June.
    10. Fimpel, Julia & Stolpe, Michael, 2006. "The welfare costs of HIV/AIDS in Eastern Europe: An empirical assessment using the economic value-of-life approach," Kiel Working Papers 1297, Kiel Institute for the World Economy (IfW Kiel).
    11. Giraud-Heraud, Eric & Grazia, Cristina & Hammoudi, Abdelhakim, 2007. "Agrifood safety standards, market power and consumer misperceptions," 105th Seminar, March 8-10, 2007, Bologna, Italy 7849, European Association of Agricultural Economists.
    12. Heather L. Bednarek & Rowena A. Pecchenino & Sally C. Stearns, 2008. "Do Your Neighbors Influence Your Health?," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 10(2), pages 301-315, April.
    13. Matthew Cole & Robert Elliott & Joanne Lindley, 2009. "Dirty money: Is there a wage premium for working in a pollution intensive industry?," Journal of Risk and Uncertainty, Springer, vol. 39(2), pages 161-180, October.
    14. J.A. den Hertog, 2010. "Review of economic theories of regulation," Working Papers 10-18, Utrecht School of Economics.

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