Regulatory Studies

A Regulatory Studies Reading List

Prepared by Peter Van Doren

Read This First

  • “Regulation at 40” by Peter Van Doren and Thomas A. Firey (Regulation 40(1): 31–37 [Spring 2017])
    A non‐​‐​technical summary of scholarship on regulation.

Classic Regulatory Economics References

  • “U.S. Industry Adjustment to Economic Deregulation” by Clifford Winston (Journal of Economic Perspectives 12(3): 89–110 [Summer 1998])
    A summary of the effects of 1970s and ‘80s deregulation of airlines, trucks, buses, railroads, banks, and energy by a leading regulatory economist.
  • “The Economic Theory of Regulation After a Decade of Deregulation” by Sam Peltzman (Brookings Papers on Economic Activity Microeconomics 1989: 1–59)
    A comparison of predictions and reality by a leading author of the “Chicago” school of regulation, which posits that regulation is supplied by the legislature in return for votes and campaign contributions.
  • “Bootleggers and Baptists in Retrospect” by Bruce Yandle (Regulation 22(3): 5–7 [Fall 1999])
    Describes how the “bootlegger” benefits of regulation at the core of the “Chicago” theory are not sufficient to explain the political support for regulation. One also needs “Baptists” who supply the moral rationale that provides cover for the bootleggers’ benefits.

From Regulation’s 25th Anniversary Issue

Agriculture

  • “Reform’s Stunted Crop” by David Orden (Regulation 25(2): 26–32 [Spring 2002])
    Describes Congress’s complete retreat from the reforms of the 1996 Freedom to Farm Act.
  • “A New Season?” by Robert W. Klein and Gregory Krohm (Regulation 29(4): 26–33 [Winter 2006-07])
    Describes the shift in agriculture subsidies from crop price supports to subsidized crop insurance.
  • “United States Agricultural Policy: Its Evolution and Impact” by Joseph W. Glauber and Anne Effland (IFPRI Discussion Paper no. 1543, July 2016)
    Comprehensive review of U.S. agriculture subsidy programs.

Antitrust

  • “Antitrust Articles in Regulation by Peter Van Doren (Cato at Liberty blog, July 26, 2018)
    A summary of the 17 articles on antitrust published between 2001 and 2018.
  • “Antitrust in the Internet Era: The Legacy of United States v. A&P by Timothy J. Muris and Jonathan E. Nuechterlein (George Mason Law & Economics Research Paper no. 18–15, July 2018)
    Contemporary fears over the market‐​dominance of large conventional retailers like Walmart and online retailers like Amazon echo those of the first supermarkets nearly a century ago.
  • “Market Power” by Peter Van Doren (Regulation 41(2): 79 [Summer 2018])
    In 1950, producer markups were about 15% over marginal cost. Over the next 30 years, they decreased approximately linearly, falling to just under 10% over marginal cost at the beginning of the 1980s. However, since then they have increased approximately linearly, returning to the 1950 level.
  • “Mutual Funds and Antitrust” by Peter Van Doren (Regulation 42(4):68–69 [Winter 2019–20])
    The often‐​made claim that stock index funds promote corporate collusion and higher prices is flawed in theory and in practice.

Banking

  • “A Simpler Approach to Financial Reform” by Morgan Ricks (Regulation 36(4): 36–41 [Winter 2013–14])
    To protect against panics, all financial institutions other than deposit banks should be prohibited from using short‐​term debt funding. Deposit banks, in turn, should be bound by reserve requirements and should be fully insured at risk‐​based fees.
  • “Handicapping Financial Reform” by Charles W. Calomiris (Regulation 41(1): 32–37 [Spring 2018])
    Bank capital needs to be measured by market value rather than book value and be composed of more equity and less debt.
  • “Regulating Banks by Regulating Capital” by Michael L. Davis (Regulation 41(1): 38–42 [Spring 2018])
    Bank capital needs to be measured by market value rather than book value and be composed of more equity and less debt.
  • “Too Small to Succeed” by Diego Zuluaga (Regulation 42(4): 26–32 [Winter 2019–2020])
    The weakening of small banks’ political power is increasingly clearing the way for market‐​oriented reforms in banking.
  • “The CFPB and Payday Lending Regulations” by Peter Van Doren (Cato at Liberty blog, February 19, 2019)
    Payday lending services are competitive, have benefits, and serve customers not easily served by traditional banks.

Behavioral Economics and Regulation

  • “Paternalism and Psychology” by Edward L. Glaeser (Regulation 29(1): 32–38 [Summer 2006])
    Many who advocate government regulation of markets use behavioral economics’ evidence about individuals’ cognitive errors as a rationale for market regulation. But government regulators would be subject to the same errors, and their mistakes would have far‐​reaching effects.
  • “Behavioral Economics” by Peter Van Doren (Regulation 35(4): 62–63 [Winter 2012–13])
    The errors made by subjects in behavioral economics experiments are the result of subjects having to wade through a narrative fog to figure out what the experimenters were asking them, not simply the product of cognitive error.
  • “Behavioral Economics: Past, Present and Future” by Richard Thaler (May 17, 2016)
    A strident defense of behavioral economics by one of its founders.

Campaign Finance

Energy

  • “A Brief History of Federal Energy Regulation” by Peter Van Doren (Down​siz​ing​gov​ern​ment​.org, March 9, 2016)
    From the 1930s through the early 1970s, federal laws regulated energy prices, restricted competition, and limited imports. In the late 1970s, policy reversed and markets for oil, natural gas, and coal were deregulated.
  • “CAFE Standards” by Peter Van Doren (Cato at Liberty blog, August 7, 2018)
  • “Energy Standards” by Peter Van Doren (Regulation 40(1): 62–63 [Spring 2017])
  • “CAFE Standards” by Peter Van Doren (Regulation 41(1): 78 [Spring 2018])
    Because consumers correctly trade‐​off initial auto prices and subsequent fuel savings, auto fuel efficiency standards are unnecessary. They also are regressive and tax imported vehicles.
  • “Lightbulb Efficiency Standards” by Peter Van Doren (Cato at Liberty blog, March 7, 2019)
    Appliance efficiency standards do not improve consumer welfare.

Electricity

  • “The Deregulation of the Electricity Industry: A Primer” by Peter Van Doren (Cato Policy Analysis no. 320 October 1998)
    Low‐​cost natural gas generation induced commercial customers to defect from the regulated electricity system and payment for its high‐​cost nuclear power.
  • “Making Sense of Electricity Deregulation” by Peter Van Doren (Regulation 23(3): 68–72 [Fall 2000])
    Combining deregulated electricity generation with regulated transmission and distribution is difficult.
  • “California’s Electricity Crisis: What’s Going On, Who’s to Blame, and What to Do” by Jerry Taylor and Peter Van Doren (Policy Analysis no. 406, July 2001)
    Retail price controls combined with a wholesale free market resulted in market meltdown.
  • “Moving Forward with Electricity Tariff Reform” by Ahmad Faruqui and Mariko Geronimo Aydin (Regulation 40(3): 42–48 [Fall 2017])
    Prices for electricity should reflect the reality of higher fixed and lower real‐​time‐​varying marginal costs.
  • “State Subsidies and Electricity Markets” by Peter Van Doren (Cato at Liberty blog, July 19, 2018)
    Renewable energy subsidies and mandates increase electricity prices by reducing profits and thus the long‐​run supply of unsubsidized natural gas generators.
  • “Is Green Energy Competitive?” by Peter Van Doren (Cato at Liberty blog, July 24, 2018)
    Centralized solar and onshore wind generation (but not rooftop solar) have average costs that are competitive with new natural gas generation. But because green energy is not dispatchable, renewable sources of electricity require backup conventional generation.
  • “A Cautionary Tale about Energy Efficiency Initiatives” by Kenneth W. Costello (Regulation Spring 2019, pp. 26–29)
    Utility energy efficiency initiatives mandated or subsidized by governments are not cost effective.
  • “Refocusing on the Consumer” by Ahmad Faruqui (Regulation 43(1): 20–26 [Spring 2020])
    Just a few years ago, the notion that utilities would need to incorporate “prosumers”—customers who generate electricity as well as consume it—into their rate design seemed like something from the far future. But that future is becoming the present.

Environment

  • “Happy Birthday EPA?” by Henry I. Miller (Regulation 34(1): 4–6 [Spring 2011])
    The EPA should be abolished and its essential functions reassigned to less scientifically challenged government organizations.
  • “The Fight Over Particulate Matter” by Peter Van Doren (Cato at Liberty blog, April 22, 2019)
    EPA regulations account for most of the estimated benefits and half of the estimated costs of all federal regulations. And particulate matter reductions account for 90 percent of the estimated benefits of EPA air regulations.
  • “Air Pollution Regulation and Grandfathering” by Peter Van Doren (Cato at Liberty blog, February 16, 2018)
    The health effects of fossil fuel emissions do not vary with the age of the emission source.
  • “A Reset for the Renewable Fuels Standard?” by Arthur R. Wardle (Regulation 42(3): 22–24 [Fall 2019])
    The 2005 amendments to the Clean Air Act mandated the use of hydrocarbon fuels made from plants. Few breakthroughs have happened in advanced biofuels, resulting in the law requiring increased use of corn ethanol. Corn ethanol may be more harmful to the environment than the oil it replaces; it certainly is harmful to surface water.
  • “Waters of the United States” by Peter Van Doren (Cato at Liberty blog, September 24, 2019)
    Placing limits on the federal role in water pollution policy will not lead to the degradation that environmentalists foresee.
  • “Water Pollution” by Peter Van Doren (Regulation 40(2): 62 [Summer 2017])
    Since 1972 the United States has spent $1 trillion on water pollution abatement. Despite that spending, the data show no obvious effects on the levels or trends at 170,000 pollution monitoring sites from 1962 to 2001.
  • “A Fatal Flaw with Climate Models” by Charles L. Hooper and David R. Henderson (Regulation 39(4): 9–10 [Winter 2016–2017])
    The 95% confidence intervals in climate models are very large because of the uncertain effect of clouds. This raises questions about the usefulness of the models in formulating and evaluating climate policies.
  • “The Social Cost of Carbon” by Jason Scott Johnston (Regulation 39(1): 36–44 [Spring 2016])
    Estimates of the economic damages from temperature increases by Integrated Assessment Models come more from assumptions than evidence.
  • “Five Questions for 3,508 Economists” by Michael Davis (Regulation 42(2): pp. 34–37 [Summer 2019])
    Economists who favor a national carbon tax, with the revenue distributed equally between Americans, need to answer five important questions: What if the tax rate is wrong? What if the rest of the world does nothing? Can imports be dealt with in the real world? What about economic growth and adaptation?
  • “Climate Change Regulation and Predictions Markets” by Shi‐​Ling Hsu (Regulation 37(2): pp. 34–38 [Summer 2014)
    There seemingly is considerable uncertainty today over the climate effects of carbon emissions. This article proposes the creation of a prediction market on various prospective climate changes that are linked to carbon emissions. Such a market would help to clarify what is the “consensus view” on climate change and would avoid many of the disagreements that bog down policy concerning climate change.

Food and Product Safety

  • “Health and Safety Regulation” by Peter Van Doren (Cato Handbook for Policymakers 2017, chapter 60)
    Examines the circumstances under which firms disclose health and safety information voluntarily as part of a business strategy rather than legal compulsion. The regulation of products should occur only if the cost per life saved through regulation is less than what people pay in market settings to incur risk.
  • “Should Automakers Be Responsible for Accidents?” by Kyle Logue (Regulation 42(1): 20–25 [Spring 2019])
    Useful incentives would be created if all or most accident costs were shouldered by automakers. This would encourage the transition to self‐​driving cars, which are expected to be much safer than human‐​operated cars.

Housing

  • “Zoning’s Steep Price” by Edward Glaeser and Joseph Gyourko (Regulation 25(3): 24–30 [Fall 2002])
    Existing home prices exceed the marginal costs of new constructions because of legal restrictions on new supply.
  • “Government Control of Fannie and Freddie in Historical Perspective” by Vern McKinley (Regulation 43(1): 28–33 [Spring 2020])
    More than a dozen years ago, the U.S. government took control of the government‐​sponsored entities Fannie Mae and Freddie Mac as part of its response to the financial crisis. The government remains in control of them today.
  • “Legalizing Zoning Rights Trading” by Chris Elmendorf and William A. Fischel (Regulation 42(2): 38–45 [Summer 2019])
    Incentivize local governments to expand housing supply by allowing them to auction off development rights in exchange for revenue.
  • “Reforming Housing Assistance” by Edgar O. Olsen (Regulation 38(2): 26–31 [Summer 2015])
    A switch to an all‐​voucher program would provide housing to many more families at a cost similar to today’s many programs.

Intellectual Property

  • “Patent Reform in the United States: Lessons Learned” by Dan L. Burk (Regulation 35(4): 20–25 [Winter 2012–13])
    Patent reform probably should be left to the courts.
  • “Are There Really Patent Thickets?” by Jonathan M. Barnett (Regulation 39(4): 14–17 [Winter 2016–17])
    Patent‐​intensive markets are not characterized by the increased prices, reduced output, and delayed innovation that should appear if the thicket thesis were correct.
  • “Patent Trolls” by Peter Van Doren (Regulation 39(4): 70 [Winter 2016–17])
    A comprehensive analysis of all lawsuits (21,300) by firms that own only patents (Non‐​Practicing Entities) from 2005 through 2015 concludes that they behave opportunistically, disproportionately suing cash‐​rich firms.
  • “The Patent System at a Crossroads” by Jonathan M. Barnett (Regulation 41(1): 44–47 [Spring 2018])
    Should patents be modified by administrative procedure?
  • “Miles to Go Before We Sleep” by Jonathan Stroud (Regulation 41(1): 48–52 [Spring 2018])
    Should patents be modified by administrative procedure?

Labor

  • “Mandated Benefits Lower Wages” by Jonathan T. Kolstad and Amanda E. Kowalski (March 2012)
    Requiring employers to offer health insurance lowers wages by the cost of the benefit but the deadweight losses are lower than if the benefit were funded through taxation.
  • “Occupational Licensing” by Peter Van Doren (Regulation 37(2): 78 [Summer 2014])
    Licensing does not improve quality and increases prices.
  • “Unemployment Insurance” by Peter Van Doren (Regulation 37(1): 70 [Spring 2014])
    If unemployment insurance premiums were fully based on employer layoff costs, net employment would increase.
  • “Ban the Box” by Peter Van Doren (Regulation 39(3): 62 [Fall 2016])
    Regulations intended to help disadvantaged job seekers do not.
  • “Employer Credit Checks” by Peter Van Doren (Regulation 41(2): 79 [Summer 2018])
    Regulations intended to help disadvantaged job seekers do not.
  • “A Seattle Game Changer?” by Ryan Bourne (Regulation 40(4): 8–11 [Winter 2017–18])
    A review of the academic literature finds that minimum wage increases are followed by decreased employment for low‐​skill workers—typically the young, inexperienced, and minorities.
  • “How Labor Regulation Harms Unskilled Workers” by Warren Meyer (Regulation 41(2): 44–50 [Summer 2018])
    The government makes it too difficult, in far too many ways, to try to make a living employing unskilled workers.
  • “Disability Insurance” by Peter Van Doren (Regulation 41(2): 79 [Summer 2018])
    Disability reform in the early 1990s in the Netherlands has resulted in long‐​run improvements in earnings and educational achievement.

Nutrition

  • “Restaurants, Regulation, and the Supersizing of America” by Michael L. Anderson and David A. Matsa (Regulation 33(3): 40–47 [Fall 2010])
    The causal link between the consumption of restaurant foods and obesity is minimal at best.
  • “FDA Misses the Mark with Food Labeling Rules” by Robert Scharff and Sherzod Abdukadirov (Regulation 37(3): 34–38 [Fall 2014])
    Neither theory nor evidence suggests that nutrition labels alter behavior or improve health.
  • “Label Nudges” by Michael L. Marlow (Regulation 40(1): 24–29 [Spring 2017])
    Neither theory nor evidence suggests that nutrition labels alter behavior or improve health.
  • “The USDA’s Meaningless Organic Label” by John J. Cohrssen and Henry I. Miller (Regulation 39(1): 24–27 [Spring 2016])
    Consumers often interpret the “USDA Organic” label as indicating a product’s safety and healthfulness. In fact, the organics program is simply a marketing ploy—the label yields higher profit margins.
  • “Soda Taxes” by Peter Van Doren (Regulation 43(1): 61 [Spring 2020])
    The taxation of beverages has not reduced soda consumption because of substitution of lower‐ for higher‐​priced soda or purchases outside the local jurisdictions that have imposed soda taxes.

Pharmaceuticals

  • “Between‐ vs. Within‐​Patent Competition” by Tomas J. Philipson and Carolanne Dai (Regulation 26(3): 42–48 [Fall 2003])
    Competition among patented drugs within a therapeutic class rather than competition from generic substitutes is the main mechanism by which pharmaceutical profits are reduced.
  • “Who Certifies Off‐​Label?” by Daniel B. Klein and Alexander Tabarrok (Regulation 27(2): 60–63 [Summer 2004])
    The experience with off‐​label prescribing suggests that initial efficacy (rather than just safety) requirements may do more harm than good.
  • “How Should Antibiotics be Regulated?” by Jonathan Anomaly (Regulation 42(3): 18–21 [Fall 2019])
    The more widespread the use of antibiotics, the more likely drug‐​resistant bacteria develop.
  • “The FDA’s Dr. Nos” by John J. Cohrssen and Henry I. Miller (Regulation 39(4): 22–24 [Winter 2016–17])
    Federal Drug Administration reviewers have strong incentive to restrict access to new drugs and other therapies until there is extensive evidence that those therapies are safe. This has costs as well as benefits.
  • “The FDA Needs More Accountability, Not More Independence” by Henry I. Miller (Regulation 42(3): 12–14 [Fall 2019])
    Federal Drug Administration reviewers have strong incentive to restrict access to new drugs and other therapies until there is extensive evidence that those therapies are safe. This has costs as well as benefits.
  • “Still Awaiting the Biosimilars Revolution” by Henry I. Miller (Regulation Spring 2015, pp. 22–25)
    Biosimilars—the generic‐​like counterparts to biologic drugs that are produced not by laboratory chemistry but by living cells—cannot have the same degree of similarity to their original brand‐​name drugs that small‐​molecule generics have to their brand‐​name drugs. Those very small differences have had large, troubling effects on human users. Thus competition (and accompanying price reductions) among biosimilars will be much less intense than small‐​molecule drugs.
  • “Biosimilars II” by Henry I. Miller (Regulation Summer 2019, pp. 2–4)
    Biosimilars—the generic‐​like counterparts to biologic drugs that are produced not by laboratory chemistry but by living cells—cannot have the same degree of similarity to their original brand‐​name drugs that small‐​molecule generics have to their brand‐​name drugs. Those very small differences have had large, troubling effects on human users. Thus competition (and accompanying price reductions) among biosimilars will be much less intense than small‐​molecule drugs.

Regulatory Process

  • “Politics and Regulatory Policy Analysis” by Stuart Shapiro (Regulation 29(1): 40–45 [Summer 2006])
    The requirement that proposed regulations undergo benefit–cost analysis does not constrain regulation.
  • “Lessons Learned, Challenges Ahead” By Susan E. Dudley (Regulation 32(2): 6–11 [Summer 2009])
    There is no constituency supporting the work of the Office of Information and Regulatory Affairs, the federal agency that evaluates the costs and benefits of regulation.
  • “Would the REINS Act Rein in Federal Regulation?” by Jonathan H. Adler (Regulation 34(2): 22–28 [Summer 2011])
    The Regulations of the Executive in Need of Scrutiny (REINS) Act would prevent federal agencies from implementing major regulatory initiatives without congressional approval. But if the public believes that more regulations are necessary or supports regulatory initiatives of a particular type, requiring a resolution of congressional approval will not stand in the way.
  • “Why Regulatory Reform?” by Stuart Shapiro and Debra Borie‐​Holtz (Regulation 37(2): 3–5 [Summer 2014])
    The motivation for regulatory reform is far more about politics than about good policy.
  • “Embracing Ossification” by Stuart Shapiro (Regulation 41(4): 8–10 [Winter 2018–19])
    Advocates of expanding government regulation traditionally oppose rigorous procedures for analyzing and adopting proposed regulations, whereas proponents of less regulation usually favor these rigorous procedures. Under the Trump administration this has reversed.
  • “Trump’s Deregulatory Record: An Assessment at the Two‐​Year Mark” by Keith B. Belton and John D. Graham (American Council for Capital Formation: Center for Policy Research, March 2019)
    The Trump administration has slowed new regulations to a trickle but run into trouble in the courts on eliminating existing rules.

Smoking

  • “Smoking’s ‘Internalities’ ” by Jonathan Gruber (Regulation 25(4): 52–57 [Winter 2002-03])
    Surely those who smoke must be misinformed about its costs and benefits—or are they? Are they a net cost to taxpayers? How much should we tax them?
  • “The New Cigarette Paternalism” by W. Kip Viscusi (Regulation 25(4): 58–64 [Winter 2002-03])
    Surely those who smoke must be misinformed about its costs and benefits—or are they? Are they a net cost to taxpayers? How much should we tax them?
  • “Bootleggers, Baptists, and E‐​Cigs” by Jonathan H. Adler, Roger E. Meiners, Andrew P. Morriss, and Bruce Yandle (Regulation 38(1): 30–35 [Spring 2015])
    The 1998 Master Settlement Agreement taxed the four major cigarette companies according to existing market share and gave the states the revenues. Untaxed electronic cigarettes threaten the status quo.
  • “Cigarette Taxes” by Peter Van Doren (Regulation 38(4): 79 [Winter 2015–16])
    Those who currently smoke and pay the high cigarette taxes have such a strong preference for smoking that further tax increases will not reduce use further and cannot be justified by health benefits.
  • “E‐​Cigarette Taxes Reduce Smokers Quitting” by Peter Van Doren (Regulation 43(1): 62 [Spring 2020])
    Taxing e‐​cigarettes at the same rate as regular cigarettes would reduce quitting by 25% over the next 10 years.

Telecommunications

  • “A Clash of Regulatory Paradigms” by Christopher S. Yoo (Regulation 35(3): 42–49 [Fall 2012])
    The convoluted history of how policy evolved from traditional rate of return regulation of telephone service to a deregulated internet.
  • “Why ‘Net Neutrality’ Is a Problem” by Peter Van Doren and Thomas A. Firey (Cato at Liberty blog, April 27, 2017)
    The history of legal and statutory attempts to regulate the internet after its initial period of flourishing under deregulation.

Transportation

  • Alternate Route by Clifford Winston (Washington, DC: Brookings Institution Press, 1998)
    Transit subsidies mainly benefit transit workers. Welfare would increase if urban transit were privatized.
  • “The Staggers Act, 30 Years Later” by Douglas W. Caves, Laurits R. Christensen, and Joseph A. Swanson (Regulation 33(4): 28–31 [Winter 2010–2011])
    Deregulation revived the rail freight industry, with most of the gains going to shippers.
  • “Railroad Performance Under the Staggers Act” by B. Kelly Eakin, A. Thomas Bozzo, Mark E. Meitzen, and Philip E. Schoech (Regulation 33(4): 32–38 [Winter 2010–2011])
    Deregulation revived the rail freight industry, with most of the gains going to shippers.
  • “Really Opening Up the American Skies” by Kenneth Button (Regulation 37(1): 40–45 [Spring 2014])
    It’s time to allow foreign airlines to compete in U.S. domestic markets.