On Balance: Advancing the Frontiers of Benefit-Cost Analysis
The new White House “Frontiers” report, Advancing the Frontiers of Benefit-Cost Analysis: Progress On Federal Priorities, Insights for the Research Community, and Emerging Topics was published October 16th, 2024, by the Subcommittee on Frontiers of Benefit-Cost Analysis (SFBCA), and Committee on the Environment of the National Science and Technology Council. This follows the inaugural December 2023 White House Press Release: Advancing the Frontiers in Benefit-Cost Analysis, and the accompanying report, Advancing the Frontiers of Benefit Cost Analysis: Federal Priorities and Directions for Future Research, January 2023 White House Fact Sheet: National Strategy to Put Nature on the Nation’s Balance Sheet, and Full Report on developing statistics for environmental-economic decisions. These follow a memorandum issued by President Biden to federal agencies, directing them to monetize their analytical approaches (Modernizing Regulatory Review or Executive Order 14094, Jan. 26, 2021).
High-Level Summary
The 2024 SFBCA “Frontiers" Report summarizes progress on the five focal areas (effects) identified in the 2023 report that are currently difficult to monetize or quantify in analyses of agency regulations, projects, programs, or other actions; highlights ways for the research community to engage with the policy process and provide policy-relevant science and economics for benefit-cost analyses; and identifies additional frontiers topics.
Emphasis on Policy Relevant Research
On page 22, the most recent Frontiers report notes, "Journals such as PLOS One, the Journal of Benefit-Cost Analysis, and the Journal of Policy Analysis and Management are peer reviewed but use different criteria than a typical academic journal... providing a more welcoming venue for policy-related research". The following JBCA articles are highlighted:
Aiken DV, Brumbaugh S. Assessing Risk, Effectiveness, and Benefits in Transportation Regulation. Journal of Benefit-Cost Analysis. 2023;14(2):318-335. doi:10.1017/bca.2023.19
García, J.L. and Heckman, J.J., 2022. Three criteria for evaluating social programs. Journal of Benefit-Cost Analysis, 13(3), pp.281-286. doi:10.1017/bca.2022.18
The report emphasizes the following "insights for producing policy-relevant research", stating, "to maximize researchers’ impact on policy, (researchers) can:
• Consider federal agencies as the audience
• Show the underlying work
• Evaluate external validity
• Discuss retrospective vs. prospective analysis
• Engage with agencies at multiple stages"
An in-depth description of these can be found on pg. 20.
The report goes on to posture that, "agencies can also take actions that would help incentivize more research on frontiers focal areas including:
• Providing access to data
• Citing relevant research in ways that will be recognized in academia
• Engaging with researchers
• Funding research on high priority questions
• Alerting researchers of the use of their work”
Progress re Focal Categories with Significant Opportunities for Advancing BCA (Summary on pg. 4)
The 2023 SFBCA report identified five focal categories with significant opportunities for advancing BCA through expanded quantification or monetization. The 2024 Report reports progress from working groups on the highlighted three of the below five effects.
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Non-Fatal Health Effects
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Ecosystem Services Effects
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Wildfires and Extreme Weather Effects
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Information and Transparency Effects
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Effects of Public Benefit Programs
Two cross-cutting themes are also called out in the 2024 Report for advancement:
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Distributional Analysis
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Risk Analysis
One new focal topic was identified and highlighted in the 2024 Report, a cross-cutting theme— Multi-Market Analysis (see pg. 33). A refreshed list of agency identified effects that could benefit from expanded analysis can be found on pg. 41.
If you are interested in writing or reading an SBCA deep dive blog post on any of the above, please email Caroline E. Hobbs with your ideas/request.