The effects of economic regulation

Publisher Summary This chapter discusses alternative approaches to measure the effects of economic regulation and reviews the empirical literature employing these approaches. Economic regulation refers to both the direct legislation and administrative regulation of prices and entry into specific industries or markets. It follows conventional treatment in distinguishing economic regulation from a host of other forms of government intervention in markets, including the social regulation of environmental, health and safety practices, antitrust policy, and tax and tariff policies. The measurement issues that discusses arise in the empirical analysis of all types of government regulation; therefore, it have structured the methodological discussion so that it has broad applicability. While the present study is by no means an exhaustive survey of the literature, it includes numerous examples of the use of different types of data and measurement techniques. These are selected to cover a range of industries and time periods sufficient to give the reader a good feeling for what is known, not known, or in dispute. The chapter examines the way alternative theoretical frameworks and empirical methodologies have been applied to study the effects of price and entry regulation on each of: prices, costs, technological change, product quality, and the distribution of income and rents.

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