When we feel protected, safety regulations can encourage the risky behavior and unintended consequences that they are trying to prevent.
Our weekly roundup includes how productivity affects music industry writers, the surprising impact of cheap oil and how tech shapes what the superrich earn.
Safety regulation can have unintended consequences. Looking at antilock brakes, “too big to fail,” and Greek loans we see the Peltzman effect.
Our everyday economics includes inelasticity, supply, regulation, entitlements, subsidies, healthcare, innovation, price floor, monetary policy, euro zone.
Regulation can have unintended consequences. With football helmets or seat belts or even financial regulation, protection can create more reckless behavior.
Statins, seat belts and unemployment benefits reduce some of life’s risks. Yes? Not always… Told that statin medication would diminish high cholesterol, some people eat more cheese, more ice cream, more steak. The result? Less healthy diets. Knowing that seat…
Can we assume that seat belts make us safer? Maybe. Writing about seat belts in 1975, University of Chicago economist Sam Peltzman described what we now call the Peltzman Effect. Sam Peltzman said that yes, seat belts do make us…