Mechanisms of Legal Effect: Perspectives from Economics

Over the past few decades, health economists have made substantial contributions to our understanding of how laws, regulations and other policies can address market failures in order to improve public health. This monograph provides an introduction to the concepts used by economists in this research. It begins by providing a discussion of the economic rationale for government intervention in a variety of markets where individual behaviors lead to public health consequences. This is followed by a discussion of policy interventions that address these market failures, beginning with demand-side approaches to promoting public health through legal interventions and emphasizing the concept of the “full price” of consumption. Legal approaches to addressing the supply side of these markets are then briefly reviewed. The last section summarizes and provides some concluding comments. Examples of where economic theory and research has helped inform public health law are provided throughout.