America's Real Criminal Element: Lead
Fun fact: the banning of leaded gasoline was one of the biggest regulatory successes in history, and went a long way to validate the model.The use of leaded gasoline was a classic market failure. It saved a small number of companies a relatively small amount of money, but was on the net a huge negative for the overall economic because it basically pumped lead directly into the bloodstream of children through their lungs, making them dumber. It didn't really make anybody sick, though, and the ultimate impact was both difficult to quantify and valuate as well as impossible to trace to any particular manufacturers leaded gasoline in any individual case.The effect of the regulation was direct. As the phaseout was implemented between the 70's to the 90's, culminating in the outright ban of leaded gasoline in the 90's, the blood lead levels in the American population dropped from 16 micrograms per deciliter in 1976 to to 3 micrograms per deciliter in 1991. This drop corresponded to the avoidance of a several point drop in IQ among children (one study found a 3.9 point drop as lead levels in children were increased from 2.4 ugrams/deciliter to 10 ugrams/deciliter).[1]The regulation ended up costing the auto/gasoline industry billions of dollars to retool. However, researchers estimated that the avoided cost from dropping blood lead levels was $17.2 billion annually per 1 ugram/deciliter reduction.[2][1] http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1257652/[2] http://www.unep.org/transport/pcfv/pdf/brochurelead.pdf