On the origins of federal food and drug regulation

This dissertation extends the economic theory of regulation to the area of consumer protection regulation, specifically drug regulation, providing further support for the general applicability of that theory.; Chapter I: "Quality and the Market Mechanism." The most widely accepted economic rationale for the regulation of foods and drugs is that of adverse selection. To put it simply, in the absence of minimum quality standards the market will fall to provide high quality goods due to problems arising from asymmetric information on the part of buyers and sellers. A model of adverse selection in markets without regulation is derived in this chapter. An alternative model, based upon the 'raising rivals' costs' model of exclusionary conduct, is also derived. Out of this chapter comes opposing predictions regarding the reaction of firm value and market structure to changes in the regulatory regime. These predictions form the core of the case studies that constitute the remainder of the dissertation.; Chapter II: "Regulation and Market Structure under the Pure Food and Drug Act of 1906." This chapter presents three industry case studies in an effort to evaluate the predicting derived in Chapter I. The three industries studied are the Butter-Margarine trade, the Flour Milling industry, and the manufacture of Ethical and Proprietary Medicines.; Chapter III: "On the Origins of the Meat Inspection Act of 1906." This chapter examines the Meat Packing industry and its initial regulation under the Meat Inspection Act of 1906. Particular emphasis is placed upon the interaction of large scale dressed meats with the market for locally butchered fresh meats.; Chapter IV: "Regulation and Market Structure under the Food, Drug and Cosmetic Act of 1938." This chapter presents three industry case studies in an effort to evaluate the predictions derived in chapter I. The three industries studied are the Canning Trade, the Cosmetics industry, and the Pharmaceutical industry.; Chapter V: "Concluding Remarks." This chapter briefly summarizes the major conclusions of the dissertation. In particular the common themes of regulation as a reaction of technology shocks is explored. The theme of using quality regulations as nontariff interstate trade barriers is also explored.