Incidence of Strict Quality Standards: Protection of Consumers or Windfall for Professionals?

Daiji Kawaguchi, Tetsushi Murao () and Ryo Kambayashi ()
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Tetsushi Murao: Kyushu University

No 7443, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This 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.

Keywords: product standard; safety regulation; incidence of government regulation; labor market of professionals (search for similar items in EconPapers)
JEL-codes: J44 (search for similar items in EconPapers)
Pages: 58 pages
Date: 2013-06
New Economics Papers: this item is included in nep-lab and nep-lma
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Published - published in: Journal of Law and Economics, 2014, 57, 195-224

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Journal Article: Incidence of Strict Quality Standards: Protection of Consumers or Windfall for Professionals? (2014)
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