Incidence of Strict Quality Standards: Protection of Consumers or Windfall for Professionals?
AbstractThis paper examines the effects of upgrading product quality standards on product and professional labor-market equilibriums when both markets are regulated. The Japanese government revised the Building Standards Act in June 2007, requiring a stricter review process for admitting the plans of large-scale buildings. This regulatory change increased the wage of certified architects in Tokyo by 30% but did not increase their total hours worked because of an inelastic labor supply. The stricter quality standards created a quasi-rent for certified architects and owners of condominiums at a cost to consumers. Evidence suggests that the stricter quality standards increased the transaction price of used condominiums by 15% in the Tokyo metropolitan area.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7443.
Length: 58 pages
Date of creation: Jun 2013
Date of revision:
Publication status: forthcoming in: Journal of Law and Economics, 2014
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Find related papers by JEL classification:
- J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-06-30 (All new papers)
- NEP-LAB-2013-06-30 (Labour Economics)
- NEP-LMA-2013-06-30 (Labor Markets - Supply, Demand, & Wages)
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