Research: Licensing Status Not Important to Consumers

[aociswundumho]

https://www.remodeling.hw.net/business/research-licensing-status-not-important-to-consumers_o

Consumers are less and less concerned about the licensing status of service professionals they hire. According to new research by Stanford University economist Brad Larsen, consumers place a much higher value on customer reviews and ratings and prices.

Occupational licensing is yet another government racket to restrict competition in order to benefit special interest groups.

"Consumers tend to heavily value prices and online reputation, but not the licensing status of professionals when they're picking whom to hire," Larsen, an assistant professor of economics and faculty fellow at the Stanford Institute for Economic Policy Research (SIEPR), said in an interview published on Phys.org. Larsen, Farronato, Fradkin, and Brynjolfsson's working paper, "Consumer Protection in an Online World: An Analysis of Occupational Licensing," was released by the National Bureau of Economic Research.

Apparently consumers can see right through the charade.

The researchers also conducted a survey of individuals who hired a home improvement professional in the past year. Of the 5,200 respondents, less than 1% listed licensing within the top three reasons for their hiring decision.

The regulatory state is by far the worst institution the political left has inflicted upon the American people.

 

[Carjosse]

https://www.remodeling.hw.net/business/research-licensing-status-not-important-to-consumers_o

Occupational licensing is yet another government racket to restrict competition in order to benefit special interest groups.



Apparently consumers can see right through the charade.




The regulatory state is by far the worst institution the political left has inflicted upon the American people.

So you are going to hire an unlicensed electrician to do the wiring on your home or go to an unlicensed dentist to get a filling?

 

[aociswundumho]

So you are going to hire an unlicensed electrician to do the wiring on your home or go to an unlicensed dentist to get a filling?

The point is that it should be my choice, not yours.

 

[Carjosse]

The point is that it should be my choice, not yours.

No, consumers should be able to trust the people calling themselves a dentist is a dentist and not a psychopath with a drill. It is about a guarantee that person meets the minimum standards for knowledge, experience, and ethics of that profession and you have recourse if not. Without that there is real potential for harm not only to the consumer but also to the people doing these services. And without government enforcement many certifications become meaningless.

 

[aociswundumho]

No, consumers should be able to trust the people calling themselves a dentist is a dentist and not a psychopath with a drill.

This is pure mommy-statism. How is it that the same adults who are competent enough to vote, are too mentally incompetent to choose someone to work on their own teeth?

It is about a guarantee that person meets the minimum standards for knowledge, experience, and ethics of that profession and you have recourse if not.

1. If that were true then licensing would be very important to consumers. But it's not true, and that's why consumers don't value it.

2. As Milton Friedman pointed out over 50 years ago, it is never consumers who ask for licensing. Instead, it is the people in the business who use licensing as a way to set up a labor cartel in order to reduce competition and increase their profits.

3. Licensing came about as an unholy alliance between stupid progressives and greedy capitalists, with consumers as the big losers.

 

[Neomalthusian]

This is pure mommy-statism. How is it that the same adults who are competent enough to vote, are too mentally incompetent to choose someone to work on their own teeth?

1. If that were true then licensing would be very important to consumers. But it's not true, and that's why consumers don't value it.

2. As Milton Friedman pointed out over 50 years ago, it is never consumers who ask for licensing. Instead, it is the people in the business who use licensing as a way to set up a labor cartel in order to reduce competition and increase their profits.

3. Licensing came about as an unholy alliance between stupid progressives and greedy capitalists, with consumers as the big losers.

I think there are likely some good points to be made about licensing regulations. Interior designers and cosmetologists have more educational requirements than EMTs, for example. Seems arbitrary and asinine.

But I disagree that it's "mommy statism" to want to see some sort of regulatory structure that helps to cut down on fraud and consumer deception. I realize customer reviews and consumer-run watchdog websites and so on can sometimes do a pretty good job to make sure people are getting a quality service or product that they believe they're paying for, and that therefore some of the licensing and regulations are outdated and relatively useless, but to me that doesn't mean we should go to the polar opposite extreme.

It could be that people don't care about licensing because it's a foregone conclusion that professionals are appropriately educated and licensed. If it were no longer a foregone conclusion, they'd have to investigate every prospective service provider much more closely to adequately protect themselves from predatory fraudulent or incompetent service providers. They don't care about it because some degree of regulation is presumed to be providing a relative baseline of consumer protection.

I don't necessarily see how it would be wildly better to have a vast sea of competing sellers, any number of whom could be disreputable or even fraudulent, and have to pore through them in search of legitimacy and competence every time. It's sometimes kind of nice to be able to assume basic standards of legitimacy and professionalism are met by whatever licensing body and the legality/illegality of practicing with/without a license. That doesn't mean there aren't potential problems with licensing, cartel/anti-trust concerns, arbitrariness, the ability of providers of education and testing to be profiteering off of the whole thing, and so on and so forth. But going anarcho-capitalist about it doesn't excite me either.

 

[aociswundumho]

I think there are likely some good points to be made about licensing regulations. Interior designers and cosmetologists have more educational requirements than EMTs, for example. Seems arbitrary and asinine.

My guess is interior designers and cosmetologist associations lobby harder for licensing.

But I disagree that it's "mommy statism" to want to see some sort of regulatory structure that helps to cut down on fraud and consumer deception.

Another way to put it is it protects adults from making their own decisions. As Herbert Spencer once said, "The ultimate result of shielding men from the effects of folly is to fill the world with fools".

I realize customer reviews and consumer-run watchdog websites and so on can sometimes do a pretty good job to make sure people are getting a quality service or product that they believe they're paying for, and that therefore some of the licensing and regulations are outdated and relatively useless, but to me that doesn't mean we should go to the polar opposite extreme.

Ok, consider this compromise: instead of licensing (which prohibits the unlicensed from doing business in the field) we have government certifications.
For example, the government sets some standard for education, training, experience, etc, and only those who meet the criteria would receive the certification, thus allowing consumers to get the benefits you claim exist for current licensing, without the major drawback of setting up a labor cartel.

I don't necessarily see how it would be wildly better to have a vast sea of competing sellers, any number of whom could be disreputable or even fraudulent, and have to pore through them in search of legitimacy and competence every time.

Because nothing on the planet improves quality and lowers prices better than competition. Everyone who wants to compete should be allowed to.

It's sometimes kind of nice to be able to assume basic standards of legitimacy and professionalism are met by whatever licensing body and the legality/illegality of practicing with/without a license.

No disrespect intended, but that simply isn't the case. I'm in the building industry, where every trade is licensed, and I see shoddy work and unprofessionalism all the time. That's the main take away from the article I link to in the first post - that consumers know and understand that government licensing is pretty much worthless.

 

[Stealers Wheel]

So you are going to hire an unlicensed electrician to do the wiring on your home or go to an unlicensed dentist to get a filling?

More to the point, are you going to buy someone else's home in which you have no idea if the builder built it safely? Is the house an electrical nightmare about to happen? And if it does happen, who do you seek redress from? The previous owner? The builder? And if there are no regulations, then no one is at fault when your family dies in the house fire. Hey! Buyer beware, fool!

Consumers are not concerned about licensure and standards because they assume it's a given, not because they see it as worthless.

If you're in the building industry and you see substandard (not up to code) work being done by licensed contractors, you have an obligation to bring those facts to light and report them to licensing boards and building inspectors.

 

[Stealers Wheel]

My guess is interior designers and cosmetologist associations lobby harder for licensing.

Should interior designers be free to paint a child's bedroom with paint containing lead? It's up to the parents who buy that two generations later to make sure the walls are safe?

Ok, consider this compromise: instead of licensing (which prohibits the unlicensed from doing business in the field) we have government certifications.
For example, the government sets some standard for education, training, experience, etc, and only those who meet the criteria would receive the certification, thus allowing consumers to get the benefits you claim exist for current licensing, without the major drawback of setting up a labor cartel.

Your proposal is a distinction without a difference. In my profession, there are standards for education, school accreditation, and only those who have met those criteria are allowed the license. Further, the license must be renewed periodically (every 2 years) and the licencee must demonstrate that during the previous 2 years they have participated in a minimum number of qualifying continuing education courses and have had no disciplinary actions or legal entanglements that would otherwise disqualify them from acting in their capacity.

This is not to limit the number of people in the profession, but rather to uphold the highest standards of the profession.

Where we live we have a health department that is responsible for inspecting local restaurants, of which there are hundreds. This done for two primary reasons: One, to protect the public from unsafe food handling practices, and two, because a large percentage of our restaurant patrons are tourists, we realize that if our community were to get a reputation for food poisoning, even from a relative small handful of restaurants, it hurts all of the restaurants in town. Rigorous standards and enforcement are good for business.

 

[PirateMk1]

The point is that it should be my choice, not yours.

More to the point, are you going to buy someone else's home in which you have no idea if the builder built it safely? Is the house an electrical nightmare about to happen? And if it does happen, who do you seek redress from? The previous owner? The builder? And if there are no regulations, then no one is at fault when your family dies in the house fire. Hey! Buyer beware, fool!

Consumers are not concerned about licensure and standards because they assume it's a given, not because they see it as worthless.

If you're in the building industry and you see substandard (not up to code) work being done by licensed contractors, you have an obligation to bring those facts to light and report them to licensing boards and building inspectors.

Thats why you have home inspections. People already do their own electrical and house repairs work and upgrades, they also use unlicensed contractors which are prevalent here in California. Licensing and inspections should not be expensive or a racket they should be to improve safety, which is currently not the case for the most part.

 

[Stealers Wheel]

Thats why you have home inspections. People already do their own electrical and house repairs work and upgrades, they also use unlicensed contractors which are prevalent here in California. Licensing and inspections should not be expensive or a racket they should be to improve safety, which is currently not the case for the most part.

What is the point of inspections if there are no standards? If there are standards, how do you hold people accountable for meeting those standards? Must we wait for the family to die in a house fire before we say "Oh, that's a shame. The contractor did not know what he was doing. By the way, where is he? Oh, he moved to another state right after the fire? Oh well!"

 

[EMNofSeattle]

So you are going to hire an unlicensed electrician to do the wiring on your home or go to an unlicensed dentist to get a filling?

Electricians aren’t really licensed by the state, at least not where I live, the government merely recognizes licenses issued by the Union.

 

[Peter]

Electricians aren’t really licensed by the state, at least not where I live, the government merely recognizes licenses issued by the Union.

Do you have evidence for this claim?

 

[EMNofSeattle]

Do you have evidence for this claim?

Lol look it up yourself

 

[RetiredUSN]

The point is that it should be my choice, not yours.

Your choice could kill people.

 

[Peter]

Lol look it up yourself

You made the claim so you provide the evidence, that's how it works.

 

[EMNofSeattle]

You made the claim so you provide the evidence, that's how it works.

You’re being silly. There’s enough info for you to run 30 seconds of google. This is the lamest “gotchya” attempt ever.

 

[Peter]

You’re being silly. There’s enough info for you to run 30 seconds of google. This is the lamest “gotchya” attempt ever.

How is asking you to provide evidence for a claim a gotchya?

If I claim you have a string of secret mistresses it's up to me to prove my assertion, that's how it works.

 

[RetiredUSN]

My guess is interior designers and cosmetologist associations lobby harder for licensing.


Another way to put it is it protects adults from making their own decisions. As Herbert Spencer once said, "The ultimate result of shielding men from the effects of folly is to fill the world with fools".



Ok, consider this compromise: instead of licensing (which prohibits the unlicensed from doing business in the field) we have government certifications.
For example, the government sets some standard for education, training, experience, etc, and only those who meet the criteria would receive the certification, thus allowing consumers to get the benefits you claim exist for current licensing, without the major drawback of setting up a labor cartel.



Because nothing on the planet improves quality and lowers prices better than competition. Everyone who wants to compete should be allowed to.



No disrespect intended, but that simply isn't the case. I'm in the building industry, where every trade is licensed, and I see shoddy work and unprofessionalism all the time. That's the main take away from the article I link to in the first post - that consumers know and understand that government licensing is pretty much worthless.

I sub out work to unlicensed tradesmen quite often doing jobs for me under my license and permits. Being unlicensed doesn't mean that they are not good at what they do, but it does mean that by law they cannot bid on work over $1000.00 in my area, and they are very restricted to what they can do to a residential or commercial property. No gas, electical, H/VAC, or load bearing walls.

I started out as a unlicensed handyman after being laid from my estimator job off back in the housing bust era. I obtained my Virginia Class "C" home improvement (HI) license soon after so that I could bid on work up to 10K. I soon got bored with a Class "C" and obtained my Class "B" (HI)................... and then after about 2 years I got my Class "A" Builders.

Class A was a bit tough because I had to have a certain amount of liquid assets set aside, so I used my home equity. A class A builder still cannot do gas/elec/h/vac without a documented state licensed journeyman on site doing the work (competent person)

You can hire "Jack Legs" (unlicensed workers) at your own risk but if they do any work requiring permits it's on you. They don't carry workers comp, limited liability insurance, bonding, and cannot pull a permit. It will catch up to you sooner or later and especially before the home sale when the inspector rolls through the joint.

 

[EMNofSeattle]

What is the point of inspections if there are no standards? If there are standards, how do you hold people accountable for meeting those standards? Must we wait for the family to die in a house fire before we say "Oh, that's a shame. The contractor did not know what he was doing. By the way, where is he? Oh, he moved to another state right after the fire? Oh well!"

You can get a civil judgement against someone no matter what state they live in.

 

[Peter]

The reason you have standards is so that you have some expectation of basic competence.
I'd hire RetiredUSN to do home improvement work because he's gone through the right training and has shown he knows what he's doing.
I don't think it's reasonable to expect everyone to have to do a bunch of research to vet anyone doing any job they need doing and making sure tradespeople have set standards seems like a good idea to me.

 

[aociswundumho]

Your choice could kill people.

Which is no different than all of the other choices you make which could kill people.

 

[Stealers Wheel]

You can get a civil judgement against someone no matter what state they live in.

But you got to wait until the family dies in the fire before you seek damages. A judgement does not mean you actually get to collect a dime. And if the shoddy contractor has no assets or insurance, oh well, too bad. Sux to b u.

The reality is licensing requirements for most professions serve the public interests. Removing those requirements will do nothing to improve that. Who would want to hire someone who can't be bothered to meet those requirements?

 

[Stealers Wheel]

Lol look it up yourself

In other words, you just made it up. Tell you what. Tell us which state and I'll indulge you. But I don't think you'll do that, because you made it up.

 

[Neomalthusian]

You can get a civil judgement against someone no matter what state they live in.

To rely exclusively on the judicial system to decide whether a violation occurred and then help people recover damages is to negate the entire purpose of having a legislature or laws. It would be an inefficient overburden of the judicial system because of an arbitrary distaste for laws and regulations. Laws and regulations inform people how not to end up violating people's rights in the first place, rather than only reacting to violations after the damage has been done.