Product safety regulation

Abstract

Market failures paired with private law failures call for safety regulation. The main dilemma for policymakers is to find 'the optimal level' of product safety regulation. Hence, in this chapter science and cost-benefit analysis are presented as important technocratic tools for risk assessment and risk management. As product safety regulation covers a wide range of industrial activities, a variety of empirical studies have been reviewed. The lively controversies on the effectiveness of some regulations, often arisen among specialists, show how difficult the appraisal of cost and benefit of regulation is, especially in the presence of 'risk-compensation' behavior. JEL classification: K32