Authors libby rittenberg 877

Performance-oriented standards: Once a health and safety problem has
been identified, the economic approach would be to allow individuals or
firms discretion in how to address the problem as opposed to mandating a
precise solution. Flexibility allows a standard to be met in a less costly way
and can have greater impact than command-and-control approaches. Mr.
Viscusi cites empirical evidence that worker fatality rates would be about
one-third higher were it not for the financial incentives firms derive from
creating a safer workplace and thereby reducing the workers’
compensation premiums they pay. In contrast, empirical estimates of the
impact of OSHA regulations, most of which are of the command-andcontrol type, range from nil to a five to six percent reduction in worker
accidents that involve days lost from work.
Opportunity cost of regulations: Mr. Viscusi has estimated the cost per life
saved on scores of regulations. Some health and safety standards have
fairly low cost per life saved. For example, car seat belts and airplane cabin
fire protection cost about $100,000 per life saved. Automobile side impact
standards and the children’s sleepwear flammability ban, at about $1
million per life saved, are also fairly inexpensive. In contrast, the asbestos
ban costs $131 million per life saved, regulations concerning municipal
solid waste landfills cost about $23 billion per life saved, and regulations
on Atrazine/alachlor in drinking water cost a whopping $100 billion per
life saved. “A regulatory system based on sound economic principles would
reallocate resources from the high-cost to the low-cost regulations. That
would result in more lives saved at the same cost to society.”
Sources: W. Kip Viscusi, “Safety at Any Price?” Regulation, Fall 2002: 54–
63; W. Kip Viscusi, “The Lulling Effect: The Impact of Protective Bottlecaps

Attributed to Libby Rittenberg and Timothy Tregarthen
Saylor URL: />
Saylor.org

877