On Balance

 September 12, 2018

 By Clark Nardinelli

 A new article in the Fall Issue of the Journal of Benefit-Cost Analysis (JBCA),  “Some Pitfalls of Practical Benefit-Cost Analysis,”  describes common pitfalls that well-meaning analysts fall into. Over the past 23 years I have worked on and supervised hundreds of benefit-cost analyses. Most of these analyses have dealt with public health regulations proposed by the Food and Drug Administration, although on occasion I have reviewed analyses from other government agencies and academia. I’ve seen these pitfalls occur many times and at one time or another I’ve been guilty of most of them.

August 28, 2018

By Clark Nardinelli and Susan Dudley

Next month marks the 25th anniversary of Executive Order (EO) 12866, which requires U.S. federal agencies, “in deciding whether and how to regulate, [to] assess all costs and benefits of available regulatory alternatives, including the alternative of not regulating.” It further states that, “in choosing among alternative regulatory approaches, agencies should select those approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity), unless a statute requires another regulatory approach.”

August 14, 2018

By Sonja Kolstoe

Gothenburg, Sweden hosted the 2018 World Congress for Environmental and Resource Economists, which met from June 25-29, 2018. The five-day conference was held at the School of Business, Economics, and Law, which is part of the University of Gothenburg. The conference was made possible by the joint effort of three major economics associations: the Association of Environmental and Resource Economists (AERE), the East Asian AERE (EAAERE), and the European AERE (EAERE).

August 1, 2018 

By Joseph Cordes 

As the feasibility of using benefit-cost analysis (BCA) as a practical tool of policy analysis has increased, so too has the need for materials to aid those of us who are called upon to teach BCA. Teaching Benefit-Cost Analysis: Tools of the Trade, edited by Scott Farrow (Professor of Economics, University of Maryland, Baltimore County), is a distinctive and welcome addition to the collection of such materials.

July 13, 2018 

By Art Fraas

Under the 1990 Clean Air Act Amendments, the U.S. Environmental Protection Agency (EPA) was required to establish standards limiting air toxics emissions from industrial plants. An article in the latest issue of the Journal of Benefit Cost Analysis  (JBCA), “Retrospective Analyses Are Hard: A Cautionary Tale from EPA's Air Toxics Regulations,” takes a retrospective look at 5 of the largest rules issued by EPA in the initial round of air toxics rulemaking over the period 1995 to 2000. For the rules examined, our estimates suggest mixed results, in terms of the reductions in emissions that were achieved. However, our efforts during the project also reinforce the difficulty of obtaining adequate plant emissions data, even where there is an established database--in this case, the Toxic Release Inventory (TRI).

June 27, 2018

By Deborah Aiken

One of the reasons I look forward each year to the annual conference of the Society for Benefit Cost Analysis is connecting with fellow economists who have chosen careers in my specialty, which has evolved to be regulatory policy and analysis. I enjoy sharing and hearing everyone’s war stories and appreciate the advice I receive from those who have “been there, done that” and hope that I add value when I offer the same to new economists working to influence the policy process.

 June 8, 2018 

By Kerry Krutilla 

It is challenging to explain benefit-cost analysis (BCA) to the general public or to members of other professions lacking sufficient knowledge of—and appreciation for—applied microeconomics. This post discusses the nature of this challenge, and raises the question: should the SBCA develop a more concerted communications strategy to better explain the fundamental concepts of the discipline and their practical application?

May 25, 2018

Review by James K. Hammitt

Pricing Lives: Guideposts for a Safer Society  (Princeton University Press, 2018) is a tour de force. It provides an entertaining, accessible account of the modern approach to valuing mortality risk. In non-technical prose, it covers the major aspects of the approach and how it should be applied to social decisions.  It shows how US regulatory agencies’ adoption of the ‘value per statistical life’ (VSL) to replace the ‘cost of death’ (i.e., human capital) approach has led to more-protective regulation and argues the VSL approach should be extended beyond regulation, to private-sector decisions about product design and to government sanctions for regulatory violations. It also finds that the values used outside the US are typically far too small; revising these upward would lead to more-protective and more-appropriate regulation in other countries.

 

Friday, May 11, 2018

By Dan Hudson

I am a Reliability Engineer and Risk Analyst for the U.S. Nuclear Regulatory Commission  (USNRC). The USNRC is the Federal agency responsible for licensing and regulating civilian uses of nuclear materials to ensure public health and safety are adequately protected. In addition to performing risk analyses of commercial nuclear power plants, I contribute to an ongoing effort to enhance the USNRC’s guidelines for performing benefit-cost analysis (BCA) to evaluate proposed regulatory actions.

Report from the SBCA President on the 2018 Annual Conference and The Plenary Presentation by Tomas Philipson

By Don Kenkel

It was my honor to preside over the 2018 Society for Benefit-Cost Analysis (SBCA) Conference  held March 14 – 16 at the George Washington University in Washington, DC. I am happy to report that by all indications it was another successful conference. We had 319 total registrants from 19 countries across 5 continents. U.S. participants represented 31 states and D.C. Half of all participants were affiliated with the U.S. federal government. The next largest group were academics (almost one-third); other attendees were from the private sector or from state and international government agencies. The three pre-conference professional development workshops were well attended and also drew a mix of participants from federal, state, and international agencies, as well as academics.

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