Private Risks from Chemical Exposures

Proponents of government regulation question the equity and efficiency of information markets. This chapter examines information markets in which chemical risks are private goods (Cross, Byrd, and Lave 1991). 

using radon as an example, 1 demonstrate how markets develop to inform people about their exposure levels and to reduce those levels. 1 then discuss equity concerns and their policy remedies in the context of reducing radon exposure. 

1 examine efficiency issues in information markets. The common-law tort system, which exists to reduce the costs of managing damages from remote risks, is the subject of great scholarly and political dispute. I review the controversies, in general and in the context of chemicals. 

Finally, I consider whether command-and-control regulation by government agencies enhances the efficient use of information. Said differently, should we permit individuals to ignore government recommendations about private goods  

Markets often provide suboptimal levels of product information because entrepreneurs who develop information have difficulty restricting its use to those who pay for it (Shavell 1987,54). Although some recent scholarship challenges that idea (Kealey 1996), assume that basic epidemiological research requires public funding. Once that information exists, can private markets disseminate it  

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Managing Private Risks from Chemical Exposures... 

Limited knowledge and high transaction costs prevent individuals from developing expertise about many remote risks. So entrepreneurs often fill the gaps. The ability to provide information about the risks of chemical exposure offers many profitable opportunities, as long as the exposure is a private good that varies among individuals. ... 

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