Justifications for Compulsory Minimum Standards Available to Purchase

The case for compulsory minimum standards in those cases where the consumer cannot readily assess the quality before purchase is examined. The most common justifications are reduction in search, reduction in risk for the consumer and monopoly profits for producers. The factors relevant to an appraisal are identified. It is shown that generalised conclusions are not possible because of the wide range of market conditions. It would appear likely that in many markets minimum standards which remove dangerous or useless items are cost effective,though basic consumer protection legislation does this for most products. They are also appropriate where costs are public rather than private. Increased levels of minimum standards are progressively less cost‐effective. Labelling can often be a superior alternative.