Unintended Consequences
Entry posted by Lord GVChamp
305 views
Originally, I was thinking about posting something about economic fallacies and "vicious cycle" thinking, but I'll save that for next week. A Christmas present of sorts.
Today, I'm more interested in talking about drop-down cribs, which the government banned this week. Basic backstory: cribs are manufactured to have one of the sides drop down, so parents can more easily reach their child. To see how this can go wrong, take a look at
On the surface, looks okay. Babies are dying due to a design that parents can screw up, so let's ban the product. Makes sense. Protects children. And politicians must like children, what with all the babies they kiss and everything. But I'm not convinced quite yet. And I'm not convinced because while preventing, say, 17 deaths over the course of 3 years definitely has some value, I am not sure what the second-order effects are going to be, meaning I don't have a clear picture of the impact of the entire legislation.
What do I mean? I mean changing the rules changes incentives and makes people react in ways that could make the new crib market MORE dangerous than the old crib market. Because every action has a reaction and a consequence, and not all of them are desirable. This plagues MANY different policies, like insuring bank deposits leading banks to take greater risks (also known as moral hazard). Maybe there are some potential pitfalls here. I'm not an expert on cribs, but let me think about some things off the top of my head. Hopefully the CPSC considered these effects before they decided to go ahead with the policy.
First, the secondary market. Not all cribs available to people out there are new units from crib manufacturers. You can also buy used cribs, say from Craigslist. The effect of this legislation, though, bans the sale of used dropside cribs, too. If dropside cribs are a large enough chunk of all cribs out there, and the used market is a big way for parents to get cribs, then the effects are HUGE on prices. Example: say 50% of cribs new parents get their cribs from the used market, and half of those are drop-side. This ban means, at a stroke, that 25% of the supply in the coming years is straight-up gone. What happens when supply goes down but demand stays the same? You got it, prices go up. Great for crib manufacturers, not so great for parents.
But the effect doesn't stop with "parents have to spend more money." When cribs get more expensive, they respond in other ways that we don't like and may jeopardize child health. For instance, they may not even BUY a crib, or delay the transition from bassinet/parent's bed to a crib. A family may have an old decrepit crib and wish to upgrade, but look at the price and decide their current model is "good enough." How large are these effects? Are they enough to completely outweigh 17 deaths over course of a few year?
There's the question of whether new cribs will be safer. Maybe instead of dropside cribs, manufacturers will move towards other unsafe designs. For instance, Toys R Us is talking about lower crib levels. Don't know if this will be good or bad, but maybe it makes it more likely for cats to jump into the crib with the baby and smother it? Don't know.
We will producing new crib units to replace the old ones. This will drive up the price of scarce natural resources, meaning less of the wood/plastic available for OTHER products, while also boosting imports from oil-producing nations. And, of course, new manufacturing=more pollution.
This list is not meant to be exhaustive, nor do I suggest that all of these concerns mean we shouldn't ban drop-side cribs. But there are things to take into consideration before making policy decisions or hailing them as landmark achievements. Me, I'm going to be skeptical.
4 Comments
Recommended Comments