Consumer Behavior and the Safety Effects of Product Safety Regulation

Abstract

A recurring issue in the economic analysis of risk regulation agencies is whether these efforts have had any significant favorable effect on safety. Although the existence of such an effect would not necessarily imply that these efforts were worthwhile, without an enhancement in safety there is no potential rationale for these regulations.... Neither the aggregative data nor the CPSC's NEISS data on particular products provide any clearcut evidence of a significant beneficial effect on product safety from CPSC actions. If there is a beneficial effect of these regulations, then it is too small to estimate reliably. Since the CPSC's regulatory efforts address a small portion of the product safety problem and in some cases bear only a tangential relationship to product safety, this type of result accords with what one might expect. A much more surprising result was the pattern displayed by poisoning rates after the advent of safety caps. For those products covered by safety caps, there was no downward shift in poisoning rates. This ineffectiveness appears to be attributable in part to increased parental irresponsibility, such as leaving the caps off bottles. This lulling effect in turn led to a higher level of poisonings for related products not protected by the caps. The more general ramification of these results is that technological solutions to safety problems may induce a lulling effect on consumer behavior. The safety benefits will be muted and perhaps more than offset by the effect of the decreased efficacy of safety precautions, misperceptions regarding the risk-reducing impact of the regulation, and spillover effects of reduced precautions with other products. Although the precise contribution of the regulation cannot be distinguished from other shifts in behavior that may have occurred in the 1970s, it is clear that individual actions are an important component of the accident-generating process. Failure to take such behavior into account will result in regulations that may not have the intended effect.