Does regulation reduce productivity? Evidence from regulation of the U.S. beet-sugar manufacturing industry during the Sugar Acts, 1934-74
AbstractWe study the impact of regulation on productivity and welfare in the U.S. sugar manufacturing industry. While this U.S. industry has been protected from foreign competition for nearly 150 years, it was regulated only during the Sugar Act period, 1934-74. We show that regulation significantly reduced productivity, with these productivity losses leading to large welfare losses. Our initial results indicate that the welfare losses are many times larger than those typically studied ? those arising from higher prices. We also argue that the channels through which regulation led to large productivity and welfare declines in this industry were also present in many other regulated industries, like banking and trucking.
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Bibliographic InfoPaper provided by Federal Reserve Bank of Minneapolis in its series Staff Report with number 389.
Date of creation: 2007
Date of revision:
Other versions of this item:
- Benjamin Bridgman & Shi Qi & James Schmitz, 2006. "Does Regulation Reduce Productivity? Evidence From Regulation of the U.S. Beet-Sugar Manufacturing Industry During the Sugar Acts, 1934-74," 2006 Meeting Papers 438, Society for Economic Dynamics.
- L0 - Industrial Organization - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-04-28 (All new papers)
- NEP-COM-2007-04-28 (Industrial Competition)
- NEP-EFF-2007-04-28 (Efficiency & Productivity)
- NEP-HIS-2007-04-28 (Business, Economic & Financial History)
- NEP-REG-2007-04-28 (Regulation)
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