Saturday, June 12, 2010

The Offsetting Effects Of Regulations

In the current environment, where many want more regulation of financial institutions, more regulation of health care and health insurance, more regulation of oil company offshore drilling, and more regulation of energy use, it is worth remembering the Peltzman effect.

The Peltzman effect notes that behavior will modify to offset the beneficial effects of the intended regulatory benefits.

Following is a video (Peltzman's one hour talk plus 30 minutes of Q&A starts at 10 minute mark) and a transcript of Sam Peltzman's speech at the American Enterprise Institute about the offsetting effects to regulation (double click video for full screen):

Transcript of Peltzman's speech is available here.

(HT: Arnold Kling for mentioning Peltzman in his blog.)

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