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7 J.L. & Pol. 1 (1990-1991)
Consumer Ignorance and Consumer Protection Law: Emprical Evidence from the FTC Funeral Rule

handle is hein.journals/jlp7 and id is 11 raw text is: Consumer Ignorance and Consumer Protection Law: Empirical Evidence from the FTC Funeral Rule Fred S. McChesney* INTRODUCTION A child of the early Sixties, consumer protection law has matured into a robust young adult as the Nineties arrive.' Its growth has been nurtured by increasingly sophisticated diets of economics, in particular the economics of information-itself born in the Sixties. Information about goods and services is now understood to have value to consum- ers, apart from the value of the goods and services themselves.2 Lack of information means that consumers may make unwise purchasing deci- * Robert T. Thompson Professor of Law and Business, Emory University School of Law, and Professor of Economics, Emory University. A.B., Holy Cross College; J.D., University of Miami; Ph.D., University of Virginia. The author was Associate Director for Policy and Evaluation at the Federal Trade Commission, Bureau of Consumer Protection, when the Funeral Rule was promulgated. This article is based on a study prepared for several funeral trade associations participating in the Federal Trade Commission's review of the Funeral Rule. The author thanks Fred Bates and Richard Higgins for useful comments; Jeffrey Wharff for computational assistance; and the National Funeral Directors Association, National Selected Morticians and the Federal Trade Commission for making available data reported here. I The first national consumer protection statutes were the Food and Drug Act, ch. 3915, 34 Stat. 768 (1906) (repealed by Act ofJune 25, 1938, ch. 675, § 902(a), 52 Stat. 1059), and the Meat Inspection Act, ch. 2907, 34 Stat. 1258 (1907) (codified as amended at 21 U.S.C. §§ 601-80 (1972)). Section 3 of the Wheeler-Lea Act of 1938, 15 U.S.C. §§ 41, 44, 45, 52-58 (1973), amended the Federal Trade Commission Act, 15 U.S.C. § 45 (1982) to outlaw unfair and deceptive acts and practices in addition to unfair methods of competition in commerce, and thus conferred general consumer protection authority on the federal government. However, most current consumer protection statutes were not passed until the early 1960s. By 1961, only 1 percent of the federal budget was spent on consumer protection, which was the concern of small units in several federal agencies. It was at about this time that consumerism, as the consumer protection movement is often called, was launched as a political force. Am. Enterprise Inst., Debating Consumer Protection Policy 5 (1980). 2 Stigler, The Economics of Information, 69 J. Pol. Econ. 213 (1961). Stigler won the Nobel prize in 1982, in part for this contribution to economics. See the Official Announcement of the Royal Academy of Sciences, The Nobel Memorial Prize in Economics 1982, 85 Scand.J. Econ. 61 (1983).

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