Surprisingly, few studies address the efficacy of this long-standing law that requires businesses to apply a "clear and reasonable" warning label to any product carrying a cancer risk—defined as a 1 in 100,000 chance of any person exposed to the product contracting cancer over a period of 70 years ("lifetime risk"). This article argues that the net effects of Proposition 65 on public health are uncertain. The frequency of warnings, the repeating of commonly understood information, the use of complex and confusing labeling, the graphic nature of the warnings, and the frequent public misunderstanding of the risk posed by low-probability events are unlikely to steer consumers toward decisions that improve their welfare. Some consumers simply ignore the warnings, while others overreact and substitute toward high-risk products because other products' labels "scare" them into focusing on avoiding small-probability risks.
The empirical section of this article examines whether cancer rates in California have changed in the wake of this law. Little to no evidence is found indicating that Proposition 65 significantly influences cancer incidence in California. This article also argues that the law imposes significant costs on many businesses, including costs associated with legal services and lawsuit settlements. The article concludes with a brief look at two possible reforms to Proposition 65 that could improve both public health and welfare.
INTENTIONS AND LEGAL REQUIREMENTS OF PROPOSITION 65
Proposition 65 resulted from increased public concern during the 1960s and 1970s for the environment and its effects on human health. As a result of that concern, Congress began awarding federal agencies such as the Food and Drug Administration, Environmental Protection Agency, and the Occupational Safety and Health Administration growing responsibility for regulating toxic exposure. Various groups in California believed more restrictive regulation at the state level was necessary to further protect public health. Proposition 65 is a product of that concern and was approved by 64 percent of California voters in 1986.
The law requires the state to publish (and update at least once a year) a list of chemicals known to cause cancer or birth defects or other reproductive harm. The list contains a wide range of naturally occurring and synthetic chemicals, including additives or ingredients in pesticides, common household products, food, drugs, dyes, and solvents. Listed chemicals may also be used in manufacturing and construction, or they may be byproducts of chemical processes, such as motor vehicle exhaust. Secondhand tobacco smoke, for instance, is included. The Office of Environmental Health Hazard Assessment (OEHHA), part of the California Environmental Protection Agency, administers the program. Businesses with less than 10 employees and government agencies are exempt from compliance.
As of this writing, the list is up to 862 chemicals. Businesses are required to notify Californians about significant amounts of the listed chemicals in products that people purchase, in their homes or workplaces, or that are released into the environment. Products require warnings whether or not the producers add chemicals from the Proposition 65 list. For instance, restaurant owners must warn customers about olives, bread, and chicken because those foods contain trace amounts of substances known to cause cancer in rodents. The substances, however, are not added by food suppliers, but rather are found naturally in the foods.
Warnings may be communicated through a variety of means that include: labeling consumer products, posting signs at workplaces, distributing notices at rental housing complexes, or publishing notices in newspapers. "WARNING: This area contains a chemical known to the State of California to cause cancer" is probably the most frequently used Proposition 65 language. Despite the requirement to inform the public, businesses are not required to provide OEHHA any information about their products, such as which chemical(s) the warnings refer to, how exposures could occur, or how much of the chemicals consumers are likely to be exposed to. Manufacturers, distributors, and retailers who provide goods to the California marketplace are subject to warning requirements regardless of whether they are located in California or not.
Proposition 65 can be enforced in three ways:
- The California attorney general can bring an enforcement action.
- Any district attorney or city attorney (for cities whose population exceeds 750,000) may enforce the law.
- Any party acting in the public interest may file a lawsuit against a business alleged to be in violation of the law.
Penalties for violating warning requirements can be as high as $2,500 per day for each violation. A party alleging a business is in violation, must first send the business a notice of the alleged violation 60 days before filing suit. OEHHA advises, "Because Proposition 65 is not enforced by a government agency, a business should seek legal advice upon receiving a 60-day notice letter." In the interim, the attorney general may take over the case.
DOES PROPOSITION 65 IMPROVE RISK COMMUNICATION?
Markets work toward controlling incentives for sellers to hide negative attributes of their products, as evidenced by stock price reactions to product recalls. Yet, markets are imperfect and cannot be expected to fully convey all known information on product risk. One firm conducting research must absorb all costs, but other firms may "free-ride" on benefits without incurring costs, thus indicating such research may exhibit characteristics of public goods. Thus, it becomes less likely any single firm finds such research profitable and private markets may provide information on risk attributes at inefficient levels.
Effective risk communication also requires that consumers receive easily understood information. Research indicates that consumers see health claims as useful, but clarity and conciseness are critical. Labels containing extraneous and repetitive information burden consumers with limited capabilities to process information. Studies assessing the effects of explicit warnings on products generally find that more explicit warnings are associated with greater levels of perceived danger, hazard understanding, injury severity, and manufacturers' concern. On the other hand, explicit warnings do not clearly alter purchases, and "ramping up" warnings may lead consumers to ignore future warnings simply because they believe past warnings were misleading. Consumers, in effect, may treat them like background noise.
Proposition 65 certainly makes warnings common. Attorney Suzanne Henderson demonstrated this in a 2004 hospitality law conference paper describing the warnings that must be issued by a typical California hotel. The warnings include: mercury in seafood; secondhand tobacco smoke; cleaning supplies and related activities; on-site construction; furnishings, hardware, and electrical components, including furniture, window treatment, locks, keys, electrical equipment, and carpeting; personal hygiene and medical supplies, including soaps, shampoos, and first aid supplies; hotel water supply systems, including faucets and other plumbing components; combustion sources, including automobile engines, gas stoves, fireplaces, and candles; office and art supplies and equipment, including carbonless paper, marking pens, copier machine chemicals, glues, crayons, and paints; landscaping supplies and pesticide treatment, including fertilizers, soil amendments, and pesticides; food and beverage service, including broiled and barbecued foods; transportation-related exposures, including motor fuels and engine exhaust; equipment and facility maintenance, including motor oil changes, carburetor cleaning, battery replacement, and facility repairs; retail sales; and recreation facilities, swimming pools, hot tubs and beaches, including beach sand (which can contain quartz sand, a form of carcinogenic crystalline silica).
Communicating imperfect risk information is especially problematic. Consumers have a particularly difficult time making sense of small probabilities or of information about an issue that lacks scientific or political consensus. Individuals may also overestimate small-probability events and underestimate larger risks they face. A case study is the 1980s Tylenol tampering incident that resulted in cyanide poisonings. The incident temporarily devastated nationwide sales of the drug, even though the risk of falling prey to the tainted pain reliever was extremely small.
Government regulation of risk communication is imperfect as well. For example, mandatory calorie-labeling laws at restaurants have not been shown to steer consumers toward "healthier" purchases. No significant change in calories purchased by adolescents (and/or their parents) was determined for New York City and Newark fast food chains that included McDonalds, Burger King, Wendy's, and Kentucky Fried Chicken. A recent review of seven studies concluded that calorie labeling does not decrease calorie purchasing or consumption. Further support comes from a study showing that, even after more than three years, government-mandated warning labels on alcoholic beverages failed to alter risk perceptions of alcohol abuse.
Businesses might protect themselves from lawsuits or bad publicity by posting warnings on any product containing even trace amounts of listed chemicals, irrespective of whether it exceeds the state's threshold. "Over-warning" may reinforce consumer inattention to the information, making it more difficult for consumers to consider risk differentials between products.
Proposition 65 advocates might argue that even if warnings are not effective in communicating risk, there are few to no negative effects, especially when the law prompts businesses to reformulate products to avoid its warning requirements. But is this argument correct? So far, there is no comprehensive study of the frequency of reformulations or, more importantly, whether public health has improved as a result of the law.
DOES PROPOSITION 65 PROMOTE PUBLIC HEALTH?
Traditionally, social science research uses a 95 percent confidence standard (p-value < 0.05) when statistically testing for policy effects. That is, ceteris paribus, the expected policy result should appear at least 19 times in 20 if the policy is to be considered effective. In this context, we examine whether cancer rates in California changed when compared to other locations that did not adopt similar "right-to-know" laws. This strategy controls for factors likely to influence cancer rates nationally and thus allows specific focus on what effect Proposition 65 has exerted on California.
Exposure to environmental substances has been variously estimated to be associated with 2–15 percent of all cancers. Included in this category are exposures to certain viruses and bacteria, exposures to known workplace carcinogens, and exposures to radiation from sunlight, radon, or medical imaging, which sometimes involves many relatively small doses that accumulate over a long time. Long-term exposures to some consumer products and environmental pollutants, both natural and man-made, may similarly increase the risk of cancer through routes that have not yet been well studied. Although their roles in cancer development remain uncertain, such substances, including some pesticides, plasticizers, and nanomaterials, may cause subtle hormonal or other physiological alterations that could contribute to the development of cancer in later life.
To test the effects of Proposition 65, I use cancer statistics collected by the Surveillance, Epidemiology, and End Results (SEER) Program of the National Cancer Institute. SEER collects cancer incidence data from population-based cancer registries covering approximately 28 percent of the U.S. population. The population covered by SEER is comparable to the general U.S. population with regard to measures of poverty and education. The SEER population does tend to be more urban and has a higher proportion of foreign-born persons than the general U.S. population.
I specifically use SEER 9 registries because they provide the longest data set for California both before and after Proposition 65. Specifically, SEER 9 registries include data for Atlanta, Connecticut, Detroit, Hawaii, Iowa, New Mexico, San Francisco–Oakland, Seattle–Puget Sound, and Utah. The San Francisco–Oakland data should indicate the effects of Proposition 65 on California while the other areas provide control groups. Data are available for cases diagnosed from 1973 onward, with the exception of Seattle–Puget Sound and Atlanta, which joined the SEER program in 1974 and 1975 respectively.
The cancer incidence rate is the number of new cancers occurring in a specified population during a year, expressed as the number of cancers per 100,000 people at-risk. The number of new cancers may include multiple primary cancers occurring in one patient; however, the primary site reported is the cancer's site of origin and not any metastatic site. In general, the incidence rate would not include recurrences. The population used depends on the rate to be calculated; for cancer sites that occur in only one sex, the sex-specific population (for example, females for cervical cancer) is used. Age-adjusted rates are weighted averages of the age-specific rates, where weights are proportions of persons in corresponding age groups of a standard population. Potential confounding effects of age are reduced when comparing age-adjusted rates computed using the same standard population.
In 1975, SEER 9 data show age-adjusted cancer incidence rates were 400.44 (both sexes), 466.85 (males), and 365.86 (females) per 100,000 people. Rates would climb slowly but steadily for all three groups until the late 1980s, when the rates for males (and, correspondingly, for both sexes) experienced a sharp increase followed by an equally sharp decrease. Since the mid-1990s, the rate for males has drifted downward slightly while the female rate has roughly held steady. In 2009, cancer incidence rates were 464.87 (both sexes), 526.55 (males), and 422.04 (females) per 100,000.
Any effects on cancer incidence from Proposition 65 are unlikely to be contemporaneous. Latency periods of cancer onset associated with toxic chemicals on the Proposition 65 list will be influenced by many factors that include amount and frequency of exposure, age, genetics, and lifestyle. Cancer incidence also stems from a complex set of factors that are independent of whether or not a jurisdiction has adopted a "right-to-know" law such as Proposition 65. The empirical strategy is simply to consider various lags to determine if any statistically significant relationship can be determined between cancer incidence and the introduction of Proposition 65. This strategy controls for other factors affecting incidence across the nation, such as lifestyle, health care, cancer detection, and air and water pollution.
Empirical examination considers lags of 10–19 years after adoption of Proposition 65 in 1986. This strategy removes concerns of "cherry-picking" lag structures in the event that empirical evidence is mixed on whether Proposition 65 has altered cancer incidence. For example, if empirical examination reveals a significant influence after 15 years, but none after 14 years or 16 years, then evidence of a systematic influence is rather unconvincing. This empirical strategy allows the data to reveal lag structure as indicated by a consistent chain of statistically significant effects. Several adjoining time periods with consistent positive or negative effects would suggest convincing evidence of a systematic effect over time.
Prop65 is a dichotomous variable that defines possible lagged effects from Proposition 65 on cancer incidence. The shortest lag starts in year 1996, 10 years following implementation of Proposition 65. That is, Prop65 takes values of 1 over 1996–2009, and 0 over 1974–1995. The longest lag starts in 2005; i.e., Prop65 takes values of 1 over 2005–2009, and 0 over 1974–2004.
Effects of Proposition 65 on the cancer incidence gap are examined by differences between three comparison locations and San Francisco–Oakland. Comparison locations are Atlanta, Detroit, and Seattle because they are also large metropolitan areas. For simplicity, in the results, "San Francisco" refers to the San Francisco–Oakland registry and "Seattle" refers to the Seattle–Puget Sound registry. A rising incidence gap indicates that cancer incidence in comparison locations is relatively higher than in California. A positive (negative) coefficient on Prop65 would indicate Proposition 65 led to a larger (smaller) gap consistent (inconsistent) with its intent of lowering incidence in California.
Preliminary empirical work indicated serial correlation whereby error terms in the empirical model (whereby the cancer gap is regressed on a constant and Prop65) are correlated. This violates the ordinary least squares (OLS) assumption of uncorrelated error terms and leads to misestimated standard errors. Durbin-Watson (D-W) statistics far outside acceptable ranges, indicate first-order serial correlation. An autoregressive trend correction—AR(1)—is used, which is a common method of dealing with serial correlation concerns in time series studies. The results tables also list Ljung-Box Q-statistics for lags of two and three years to test for higher-order serial correlation.
All sexes / Figure 1 displays SEER 9 cancer incidence rates for all sexes over the 1974–2009 time period. Incidence rates rose and peaked around 1993 in all four locations. Rates then fell from peak levels, with the steepest declines in Atlanta and San Francisco. Casual inspection indicates all four locations experienced falling cancer incidence around the same time period, although only San Francisco citizens were living under Proposition 65.