27 Jul 2007

Who Pays the Cost of Regulation?
Insights from corporate income tax incidence

by Richard Belzer

in Regulatory Economics

Regulation is widely understood as a tax on the activity or person being regulated. Where these activities repair genuine market failures, benefits from regulation may result. If there are benefits from, say, automobile safety regulation, one would expect the beneficiaries to be persons who otherwise would have been killed or injured at the pre-regulatory safety level.

But what about the costs of regulation? Who bears them? More...

6 Jul 2007

To Beer or Not to Beer?
A complex governmental solution to a simple economic problem

by Richard Belzer

in Regulatory Economics, Regulatory Policy

The Indiana legislature has enacted a law making it a crime to recycle beer kegs. Apparently, their value as scrap metal exceeds the deposits beer distributors charge, so a lot of empty kegs wind up being sold to scrap metal dealers.

Solving this problem through governmental action was a lot more complicated than solving it through markets. And it might not work. More...

22 Jun 2007

What Is a Firm?
Economics reasoning in shareholder securities fraud suits

by Richard Belzer

in Regulatory Economics

The U.S. Supreme Court decided on June 21 that under federal law governing shareholder suits alleging securities fraud (Tellabs v. Makor Issues and Rights), "an inference of scienter must be more than merely plausible or reasonable—it must be cogent and at least as compelling as any opposing inference of non fraudulent intent." Newspaper commentary on the case correctly suggests that this will make shareholder suits more difficult. However, other aspects of economic reasoning in these stories has been woefully lacking.

Exhibit A is Stephen Labaton's Page One article in the New York Times. More...