Thursday, March 13, 2014
A Test of Induced Innovation
Can government mandates cause innovation? The CAFE fuel economy standards are a prime example of Federal attempts to nudge vehicle makers to invest more in R&D for creating more fuel efficient vehicles. In California, there is now a new push for consumer product makers to design safer products. The DTSC is in charge. Here is its recent announcement. I have an interest in this subject both as a consumer of such products and two years ago I performed a prospective economic analysis of the likely effects of this regulation.