How Do Federal Regulations Affect Consumer Prices? An Analysis of the Regressive Effects of Regulation

47 Pages Posted: 7 Jun 2018

See all articles by Dustin Chambers

Dustin Chambers

Salisbury University - Department of Economics and Finance

Courtney Collins

Rhodes College

Date Written: 02/23/2016

Abstract

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

Chambers, Dustin and Collins, Courtney, How Do Federal Regulations Affect Consumer Prices? An Analysis of the Regressive Effects of Regulation (02/23/2016). MERCATUS WORKING PAPER. Available at SSRN: https://ssrn.com/abstract=3191409 or http://dx.doi.org/10.2139/ssrn.3191409

Dustin Chambers (Contact Author)

Salisbury University - Department of Economics and Finance ( email )

Salisbury, MD 21801
United States

Courtney Collins

Rhodes College ( email )

2000 N. Parkway
Memphis, TN 38112
United States

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