How Do Federal Regulations Affect Consumer Prices? An Analysis of the Regressive Effects of Regulation
47 Pages Posted: 7 Jun 2018
Date Written: 02/23/2016
While several scholarly papers have documented potential costs associated with the burden of federal regulations, none have provided a comprehensive empirical analysis of the effect of regulations on consumer prices. This study examines the relationship between regulatory expansion and higher prices and asks whether those price increases have a disproportionately negative effect on low-income households. By combining microdata from the Consumer Expenditure Survey with industry-specific regulation information from RegData and price changes in the Consumer Price Index, we find evidence of regressive regulatory effects. Our results suggest that the poorest households spend a larger proportion of their income on goods that are heavily regulated and subject to both high and volatile prices.
Suggested Citation: Suggested Citation