EconTalk Sam Peltzman on Regulation
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Nov 13, 2006 
Sam Peltzman, University of Chicago economist known for empirical work on regulation and safety. He discusses how safety rules can produce unintended consequences, his landmark automobile safety findings, trade-offs from FDA drug-efficacy rules, delays and innovation costs, and how politics, industry incentives, and activism shape regulatory outcomes.
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Incentives Make Regulatory Gains Partly Self-Defeating
- The Peltzman effect generalized: regulating behavior changes incentives and often offsets regulatory intent.
- Over 30 years many studies applied this idea across countries and domains, confirming persistent compensating behavior.
Market Wealth Effects Would Raise Car Safety Without Mandates
- Wealth-driven market forces would have made cars safer over time even without regulation.
- Peltzman compared actual outcomes to this counterfactual and found regulation added little beyond market-led safety improvements.
Airbags And Anti Lock Brakes Had Costly Early Harms
- Sam Peltzman noted airbags and anti-lock brakes had harmful initial effects and required corrective rules.
- He argued market rollout might have limited harm by testing innovations in select models before blanket mandates.