The risky business of regulation

I got published today at The Freeman. Topic is risk and regulation—why using statistical aggregates on risk exposure to fashion regulations in response necessarily imposes higher costs on people who already take measures to mitigate the risk under review.

But that’s a complicated explanation. My bottom line here is that many regulations designed to mitigate some risk of harm benefit the reckless at the expense of the careful. Those who already take measures to mitigate certain risks in their lives (the careful) pay twice when government piles on regulations that increase the cost of whatever was causing that risk. They give up whatever they paid pre-regulation to achieve enhanced safety, and they pay post-regulation for the extra resources required for a product or service to pass muster.

I use food safety regulations as an example. Regulations designed to enhance food safety to mitigate risk of E. coli, for example, will raise food costs for everyone, but will only help those whose diet includes foods susceptible to E. coli.

Still don’t get it? Read the article here.

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