Thursday, January 19, 2012

Job Leakage and Local Regulation: Evidence from the Dirty Movie Industry

Los Angeles has some leading industries.  We have tourism, Kobe Bryant and our Universities (I'm including health care at the hospitals there) and dirty movie production.    We are about to run a natural experiment concerning the unintended consequences of unilateral regulation.  Los Angeles has mandated condom use in its "adult films".   I applaud public health efforts but I wonder whether this regulation will be effective or whether production will move to a "pollution haven"?  A "pollution haven" would be another location that has not past and doesn't plan to pass such regulation.   The interesting part here is that activists here are aware of this possibility.

To quote the piece:

"Mr. Weinstein (the president of the AIDS Healthcare Foundation) said the argument that the pornographic film industry would move out of Los Angeles is a “big lie.”
“They cannot just pick up their stakes and move to another state,” he said. “They’d hardly be welcomed in West Virginia or Utah or Mississippi, or even a place like Nevada, where legal prostitution is highly regulated and condoms are required. And we will follow them wherever they go.”  "
The actors can get on an airplane and film in a developing country.   Who would bear the incidence of this extra cost?  Will there be off-shoring of these jobs?

1 comment :

Curt said...

It will serve to regulate the higher production business which is already in decline, but have no impact on the low cost and zero-cost production business that is driving the high production business out of the market.

It will simply serve to move the higher budget business outside of the city limits, and have no impact on the low budget business that constitutes the vast bulk of adult content.

In fact, it will give higher production status to those companies that DO produce elsewhere. They can even advertise it as the mark of a superior product.

It's like ticketing moms in minivans for going 5mph over the limit - it gives the impression of the force of law to the highly compliant and highly regulated, and ignores the fact that it's an impression only because moms in minivans are already the safest citizens.

Full of sound and fury, signifying nothing.