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08/31/2021








By Ted R. Miller, Pacific Institute for Research and Evaluation and Curtin University School of Public Health, and Mark A. Cohen, Vanderbilt University

Benefit-cost analyses of criminal justice policies, early childhood education, at-risk youth programs, and other interventions that reduce crime have moved beyond the academic arena into applications by both state and federal policy makers (Welsh, Farrington, & Gowar, 2015). Despite this growing interest in benefit-cost analysis, our recent article in the Journal of Benefit-Cost Analysis (Miller, Cohen, Swedler, Ali, & Hendrie, 2021), provides the first estimates in 25 years of the numbers and total costs of crime against individuals in the US. 
08/23/2021

By Dan Acland, University of California Berkeley

On his first day in office, President Biden issued a memorandum titled “Modernizing Regulatory Review,” directing the director of the Office of Management and Budget to produce a set of recommendations for how to improve regulatory review. 
08/05/2021

By Caroline Cecot, Antonin Scalia Law School at George Mason University; Bethany Davis Noll, Executive Director of the State Energy & Environmental Impact Center, Affiliated Scholar at the Institute for Policy Integrity, and Adjunct Professor at NYU School of Law; and Richard Revesz, AnBryce Professor of Law and Dean Emeritus at the New York University School of Law 

An important lesson from the Trump days is how a robust cost-benefit analysis helps an agency both defend itself in court and guard against future rollbacks. But agencies must also ensure that they finalize any big policies in time to have the rules reviewed in court before the next transition, which means that there is no time to waste. These competing demands put huge pressures on agencies in a new administration. These lessons also highlight significant opportunities.
07/30/2021

By Matthew Adler, Richard A. Horvitz Professor of Law and Professor of Economics, Philosophy, and Public Policy, Duke University

Measuring Social Welfare: An Introduction (Oxford University Press 2019) is an overview of the “social welfare function” (SWF) framework for policy analysis. The book covers the underlying theory of SWFs in some detail, here drawing upon both welfare economics and the philosophical literature on well-being and distributive justice. Measuring Social Welfare also demonstrates how SWFs can be used as a practical policymaking tool. One chapter of the book offers a detailed study of the use of SWFs, as compared to benefit-cost analysis (BCA), with respect to fatality risk regulation. (Adler 2019, ch. 5)
07/08/2021

One of the most popular sessions at the SBCA 2021 Annual Conference was on combining economics and epidemiology to understand COVID-19. Session speaker Chris Avery shares a brief statement below.
- On Balance Editor Rob Moore

By Christopher N. Avery, Harvard Kennedy School

Thomas Schelling suggested in his book Micromotives and Macrobehavior that cost-benefit choices by individuals can explain the emergence of population-level phenomena in a game theory model. We can apply Schelling’s binary choice framework to social distancing. In early stages of an epidemic, there is limited incentive to practice social distancing. Once infections become sufficiently widespread, there are incentives for some people to practice social distancing, but it’s not self-sustaining for everyone to do so. At that point, Nash equilibrium in a simple model requires a middle-ground solution where just enough people practice social distancing so that others are indifferent between social distancing and regular activity based on their immediate risk of infection. This equilibrium implies a fixed probability of infection to people who are not practicing social distancing -- thus suggesting a long-lasting plateau in the infection rate after an initial period of exponential growth. (references: David McAdams and Flavio Toxvaerd). One challenge for policy makers is that interventions such as “test, trace, and quarantine”, mask wearing, and (partial population) vaccination which reduce the baseline probability of infection may also encourage free riding. That is, self-interested cost-benefit comparisons by individuals tend to undo the effects of policy interventions in this context. Messaging campaigns that emphasize the importance of coordinated efforts to reduce infection rates may be necessary for these policy interventions to succeed. On a broader level, the course of an epidemic reflects a combination of government policy and private behavioral choices, which makes predictive modeling very difficult.
07/08/2021

One of the most popular sessions at the SBCA 2021 Annual Conference was on combining economics and epidemiology to understand COVID-19. Session speaker Natalie Dean shares a brief statement below.
On Balance Editor Rob Moore

By Natalie Dean, University of Florida, Department of Biostatistics

Past studies of Ebola, HIV, dengue, and Zika by infectious disease epidemiologists provide a road map for the use of outbreak and contact tracing data to estimate transmission parameters for application in mathematical models. There are several primary goals for modeling efforts in this context. First, we use models to conduct estimation and inference. Early on in the pandemic, this included estimating the basic reproduction number and the infection fatality ratio. Model-based estimation formalizes our assumptions about what is observed and what, importantly, is missing. Another major goal is to explore different strategies and their performance across scenarios. We can use modeling to explore how sensitive the optimal strategy is to uncertainty, given our best understanding of the epidemiology. Finally, we use models to make projections or forecasts. This is what people often think of with infectious disease modeling, even though it is just one piece of the field. It is important that modelers communicate the limitations of these projections clearly, and that consumers do not become overly reliant on a single model. Modelers must also embed continuous checks to evaluate real-time performance of projections. The results of models can be valuable inputs to decision-makers, but of course the ultimate decision relies on many more sources and a broader value judgment. Infectious disease experts could ideally work closely with economists, but infectious disease experts during a pandemic suffer from a lack of bandwidth. Making mathematical models open source and easily accessible could enable outside groups to benefit from the epidemiological insights and apply the models to interdisciplinary research.
07/08/2021

One of the most popular sessions at the SBCA 2021 Annual Conference was on combining economics and epidemiology to understand COVID-19. Session speaker Bill Bossert shares a brief statement below.
On Balance Editor Rob Moore
 
By William H. Bossert, Harvard John A. Paulson School of Engineering and Applied Sciences

Epidemic models often generate new terms or phrases to describe their behavior. Two of these, “herd immunity” and ”flattening the curve”, have been widely misunderstood and misused in the COVID epidemic by media, policy makers and even epidemiologists, who should know better. They have been held up as goals of public health management, but there is a deep down-side of each. Achieving herd immunity is just reducing the number of susceptible hosts for the pathogen to the point that the chance of an infected individual contacting a susceptible to transmit the pathogen isN too small to support the persistence of the disease. This is achieved at the cost of terrible human suffering or by vaccination that is measurably costly and it is difficult to achieve adequately high vaccination rates. Flattening the curve just trades acute pain for chronic pain. Reducing peak suffering and health care cost is replaced by an extended period for each, with only very small reduction in summed morbidity and cost. It can allow more time for the evolution of new strains that might be less sensitive to established therapies or vaccines.
07/08/2021

One of the most popular sessions at the SBCA 2021 Annual Conference was on combining economics and epidemiology to understand COVID-19. Session speaker Ellie Murray shares a brief statement below.
On Balance Editor Rob Moore
 
By Eleanor J. Murray, Boston University School of Public Health

Public health responses to epidemics have been developed and refined over more than five centuries of experience. In recent decades, thirteen new zoonotic infections that affect humans, from Ebola in 1976 to Middle East Respiratory Syndrome in 2012, have emerged. Based on these experiences, the CDC Field Epidemiology Manual lays out a clear set of steps for outbreak investigation and response, including the importance of communicating clearly with the public. In countries and regions where time-tested public health tools based on these steps have been used, COVID is largely under control. The tools that appear to have worked the most successfully for COVID include: 
  • Rapid identification of cases, and screening high-risk groups
  • Isolation of suspected, probable, or known cases
  • Quarantine of potentially exposed individuals
  • Non-pharmaceutical interventions (eg masking, ventilation)
  • Limiting contact opportunities
  • Increasing public awareness and buy-in
06/24/2021

By W. Kip Viscusi, Vanderbilt Law School
 
The value of a statistical life (VSL) serves as the linchpin in the evaluation of prospective risk and environmental regulations. The estimated rate of tradeoff between fatality risks and money provides the basis for government agencies to monetize mortality risk reductions. For several decades, the VSL has been solidly entrenched in the benefit components of regulatory impact analyses. Recently, U.S. government agencies have used VSL estimates between $9 million and $11 million to estimate the prospective benefits for each expected death that is prevented by government regulations. The VSL sets the efficient price for small changes in risk, which is an efficiency reference point that has general applicability. This article elaborates on the argument for the expanded use of the VSL that was presented in my book, Pricing Lives: Guideposts for a Safer Society (Princeton University Press, 2018). I advocate the application of the VSL in a broad range of contexts. The additional venues where the VSL could play an instrumental role include evaluation of risk policies, setting the magnitude of sanctions for regulatory violations, the determination of corporate liability for product risks, and setting the magnitude of damages in court cases.​
06/08/2021

By John D. Graham, Paul H. O’Neill School of Public and Environmental Affairs at Indiana University

President Biden's regulatory-reform calls for an updating of OMB Circular A-4, the obscure technical guidance that governs how regulatory agencies perform benefit-cost analysis (BCA) and how OMB reviews agency analyses.  Here are some issues ripe for reconsideration, as A-4 has not been updated since 2003.
05/18/2021

By Naghmeh Niroomand, Empa-Swiss Federal Laboratories for Materials Science and Technology and Glenn P. Jenkins, Queen's University 

The objective of the electricity transmission project is to increase domestic electricity consumption by improving the availability and reliability of electricity in Nepal’s electricity grid. This investment is to be financed through a grant from the US government via the Compact between the Millennium Challenge Corporation (MCC) and the Government of Nepal at a proposed cost of US$ 530 million. In addition, the Nepal Electricity Authority (NEA) is in the process of undertaking a number of generation projects with a total cost of approximately US$ 350 million, facilitated by funding of US$ 150 million from the Asian Development Bank and several bilateral development assistance organizations. Hence, the total investment program for system improvement is approximately US$ 880 million.
05/11/2021

By Alain C. Enthoven, Stanford Graduate School of Business

Rob Moore invited me to share further reflections on BCA in practice, lessons from 50 years ago but still relevant today.
05/05/2021

By Jon Strand, World Bank

Environmental valuation has over the last 40 years grown into a major field within environmental and resource economics. Sizable resources are every year put into environmental valuation work, and an entire industry of analysts is devoted to it. There is however little discussion of benefits versus costs of these studies. A small part of them are innovative and part of fundamental research, and should clearly be funded, and published. But by far most valuation studies are much more practical and aim to assess particular goods or policies with less general interest to the broader public. Their usefulness should therefore be scrutinized.
04/20/2021

By Mark Radin, University of North Carolina at Chapel Hill

The evidence access to safe sanitation services is essential for reducing child mortality and improving public health is overwhelming (Mara et al. 2010 & Prüss-Ustün et al. 2019). The international public health and medical communities have reached a consensus that access to sanitation services is a priority. Readers of the British Medical Journal voted the “sanitary revolution” as the most significant medical achievement since 1840 (Ferriman 2007). The United Nations’ Millennium Development Goals and Sustainable Development Goals both include explicit targets for increasing access to sanitation services. Despite overwhelming support for promoting sanitation in low-income countries, however, the problem remains large as an estimated 4.2 billion people worldwide are using inadequate sanitation facilities and almost 700 million have no access to any sanitation (UNICEF and WHO 2020). 
04/06/2021

By Dan Acland, University of California Berkeley

Financial transfers from taxpayers to program recipients (such as Temporary Assistance to Needy Families, or TANF, in the US), are treated as having no effect on net benefits in benefit cost analysis, because, in dollar terms, the benefit they generate for recipients is exactly offset by the cost to taxpayers.  But if poverty has the effect of reducing the rationality of recipients relative to taxpayers, and if getting out of poverty increases it, then transfers may actually generate a non-zero net benefit, which could be positive or negative. 
03/30/2021

By Elisabeth Gilmore, Clark University

Exposure to air pollution continues to be a major health risk, including worsening health risks related to COVID-191. Thus, accounting for these benefits of these avoided health risks is critical in the evaluation of policies that focus on improving air quality and also play an important role in the anticipated climate policies, where improving air quality should be considered as a major co-benefit. However, compared to the scrutiny that has been given to the relationship between exposure to air pollution and adverse health effects, modeling the transport and fate of air pollutants from the emission source to the ambient concentrations to which we are exposed is often given more limited consideration in the modeling chain from emissions to monetary valuation for air pollutants. 
03/23/2021

By David Greenberg, University of Maryland, Baltimore County

An important and difficult issue in benefit-cost analysis is how to deal with the distributional impacts of policies. An approach to this issue is described in a recent article published in the fall 2020 issue of the Journal of Benefit-Cost Analysis by Anthony Boardman, Aidan Vining, David Weimer, and me. This blog summarizes our analysis.
03/16/2021

By Scott Farrow, University of Maryland, Baltimore County, (UMBC) and University of Southern California's National Center for Risk and Economic Analysis of Terrorism Events (CREATE)

If the Value of a Statistical Life (VSL) is observed to be a function of income and policy fixes VSL as a constant, then policy has defined welfare weights over income.

Few topics are as controversial between the public and benefit-cost analysts as placing a value on a statistically lost or shortened life, the VSL.  Recent public discourse and civil unrest are in part driven by whether some classes of lives matter more than others.  Yet with the dry logic of economists it is possible to combine evidence based VSLs that change with income, the less money you have the lower the VSL, with the public policy VSL that is chosen to be constant. 
03/09/2021

By Phoebe Koundouri, Athens University of Economics and Business

Happiness Economics (HE) is concerned with the utility consequences of economic choices, while Experimental Economics (EE) studies choice behavior. Both HE and EE are branches of Behavioral Economics (BE) and they often lead to similar conclusions, which are at odds with assumptions of the Standard Economic Model (SEM). In the SEM the decisions maker maximizes a utility function with complete, transitive and self-regrading preferences, which are affected only by the levels of one’s own payoffs (the payoffs of other individuals and other generations are not considered). The SEM has no ethical underpinnings and no distributional concerns. For many economists, as well as scientists from other disciplines that endeavor to develop interdisciplinary frameworks and systems, which include socio-economic considerations, the SEM is unsatisfactory.
03/02/2021

By Charles F. Manski, Northwestern University

In a recent paper in the Journal of Benefit-Cost Analysis (Manski, 2020), I observed that formation of COVID-19 policy must cope with many uncertainties about the nature of the disease, the dynamics of the pandemic, and behavioral responses. I noted that these uncertainties have been well-recognized qualitatively but not satisfactorily characterized quantitatively. I argued that credible measurement of uncertainties would improve prediction of policy impacts and promote reasonable policy decisions.
02/25/2021

By Clark Nardinelli and Susan Dudley

In January, SBCA organized its first panel as an affiliate society for the Allied Social Sciences Association/American Economic Association annual meetings.1 The session, titled “Regulatory Benefit-Cost Analysis -- Advice for a New Presidential Term,” featured a panel dispensing advice to the incoming administration on improving and expanding the use of benefit-cost analysis.2

SBCA Vice President Glenn Blomquist chaired the panel discussion that included three former SBCA presidents (Susan Dudley, Don Kenkel, and Clark Nardinelli) as well as Professors Michael Greenstone and Howard Shelanski. Dudley (the George Washington University) and Shelanski (Georgetown University) served as administrators of the Office of Information and Regulatory Affairs (OIRA) in the Bush and Obama administrations. Kenkel (Cornell University) and Greenstone (University of Chicago) served on the staff of the Council of Economic Advisors in the Trump and Obama administrations. Nardinelli served as the Senior Economist at the Food and Drug Administration.
02/18/2021

By W. Kip Viscusi, Vanderbilt Law School

International studies valuing mortality risk changes often rely on stated preference estimates of the value of a statistical life (VSL). Because labor market data in most countries are not as reliable as the fatality rate statistics in the United States, stated preference evidence for the VSL provides a popular research strategy for obtaining country-specific estimates. Unfortunately, this article finds that this literature is subject to rampant publication selection effects, leading to huge biases in the estimated VSL levels.
 
02/03/2021

By Clark Nardinelli and Susan Dudley

The Department of Justice recently released an opinion on “Extending Regulatory Review Under Executive Order 12866 to Independent Regulatory Agencies.”1 The memorandum, dated October 8, 2019, concludes that “The President may direct independent regulatory agencies to comply with the centralized review process prescribed in Executive Order 12866.” The opinion means that the President can require the independent agencies to perform benefit-cost analyses of all significant regulations and submit the regulations for review to the Office of Information and Regulatory Affairs in the Office of Management and Budget.
01/25/2021

By Daniel J. Hekman, University of Wisconsin

In Volume 11 of The Journal of Benefit-Cost Analysis, Thunström, Newbold, Finnoff, Ashworth, and Shogren presented their findings on the national benefits and costs of physical (or social) distancing measures. Their benefit-cost analysis shows a net benefit of $5.6 Trillion to the US economy over 30 years. However, work on the economics of education and family by Hanushek, Boyd, and others suggests that the long-term impacts on present and future productivity of one aspect of physical distancing policies, virtual learning and school shutdowns, may be more severe than this initial model supposes. 
12/21/2020

By Daniel J. Acland, University of California Berkeley

This post is a summary of a paper I’ve written called “What’s in, what’s out? Towards a rigorous definition of the boundaries of benefit-cost analysis,” forthcoming in Economics and Philosophy. Students are typically told that benefit-cost analysis is an application of the potential Pareto criterion, which defines net benefit as the difference between the willingness to pay of winners for their gains from a policy and the willingness to accept of losers for their losses. If the difference is positive, the policy is a potential Pareto improvement, and we say that it generates positive net benefits. Economic philosophers have presented many objections to this definition, but none of these objections refutes the basic logic.
12/09/2020

By Peter Abelson, Applied Economics

In my paper for this journal earlier this year (Abelson, 2020), I discussed how seven official guides to benefit-cost analysis (BCA) and the leading international text on BCA (Boardman et al., 2018) deal with eight contentious issues: the issue of standing, core valuation principles, the scope of CBA, changes in real values over time, the marginal excess tax burden, the social discount rate, the use of benefit-cost ratios, and the treatment of risk. I did not discuss, however, arguably the most potent cause of poor BCA studies: appraisal optimism, which is sometimes referred to less courteously as appraisal bias. Indeed, appraisal optimism receives little attention in most BCA textbooks and official guides. I will attempt here a partial rectification of these omissions.
10/28/2020

October 28, 2020
By: Catherine L. Kling

For over 50 years, economists have developed and refined methods to value environmental and other nonmarket goods to provide benefit estimates that are commensurate with goods that are exchanged in markets. Without these estimates, benefit cost analysis of environmental regulations risk erroneous conclusions regarding the net benefits of a regulation. The methods can be broadly categorized into revealed preference (that infer values from behavioral clues) and stated preference (which directly elicit values through surveys). Despite their longer history and the many documented shortcomings, revealed preference methods have not been subject to the intense validity and reliability challenges as their stated preference counterparts. And, unlike stated preference methods (see Johnston et al.2017), there has not previously been an effort for scholars of the approaches to develop a set of “best practice” guidelines for the implementation and reporting of these analyses.

 
10/07/2020

October 7, 2020
By: Don Kenkel

Since electronic cigarettes were introduced, in 2007, they have presented controversial public health tradeoffs. E-cigarettes provide users with the addictive chemical nicotine but without exposing them to the harmful combustion-generated toxicants in cigarette smoke. On the one hand, because smoking combustible cigarettes is estimated to lead to almost 500,000 deaths each year, e-cigarettes have great potential as a harm reduction strategy. In particular, evidence from randomized clinical trials shows that vaping e-cigarettes helps adult smokers quit. On the other hand, the growing popularity of vaping among teens raises concerns about nicotine addiction, the possibility that vaping is a gateway to smoking, and unknown future health consequences. More teens now vape e-cigarettes than smoke cigarettes. In the National Youth Tobacco Survey, the fraction of high school students reporting vaping within the past 30 days increased from 11.7 percent in 2017 to 27.5 percent in 2019, before dropping to 19.6 percent in 2020.  Some public policies – increasing the legal purchase to 21 and banning e-cigarette flavors popular with teens – try to target teen vaping. Other policies, most notably e-cigarette excise taxes, discourage both adult and teen vaping.
 
09/22/2020

September 22, 2020
By: Joel Huber

Novel threats call us to action. Witness the response to the 9/11 attack and more recently to the coronavirus. Such risks may be particularly compelling if citizens do not understand how to deal with the harm or because of ambiguity around the probability that the threat will be realized. 
08/31/2020

August 31, 2020
By: Craig Thornton

Benefit-cost analysts essentially ask for a lot of trust. They look to inform policy decision-making by using a tool that boils very complex choices down to a seemingly simple comparison of the relative values of benefits and costs. If an analyst’s work is to be taken seriously, the decision makers must have confidence that the analyst is objective and competent, that the results being provided accurately capture what is known about any choice’s implications. The decision makers may have their own biases and interests and many choices will require decisions from a wide array of people with varying perspectives. But through the whole policy-making process, decision makers do not want to have to worry about hidden agendas, skewed data, or sloppy analysis in the information intended to inform their decisions.

 
08/12/2020

July 12, 2020 (re-post from 2/25/2020)
By: Sir Murray F. Brennan, MD

AS A YOUNG CLINICIAN, I was interested in making a difference; it did not matter how much of a difference, as long as I could claim some patient benefit. And I really didn’t care what benefit: better survival, less local recurrence, shorter hospital stays, fewer narcotics—the specifics did not matter. With retrospective observational studies, it was easy to claim a benefit when I was demonstrating a potential or probable association. I intervened, and the patient improved! If I could prove that claim and make it look scientific with a randomized controlled trial, was I then done?
 
07/15/2020

July 15, 2020
By: Rob Moore

What a year it has been. Between the unfolding of a global pandemic and nationwide protests around the topic of police brutality, 2020 has already been a jam-packed year for public policy, and we haven’t even made it into election season.
 
07/01/2020

July 1, 2020
By: Lisa A. Robinson 

Reducing COVID-19 risks requires making extraordinarily difficult decisions that trade-off saving lives and economic damages. Benefit-cost analysis is well-suited for investigating these trade-offs and informing these decisions. However, interpreting and using the results requires understanding the framework and addressing its limitations, including the uncertainties in the value of mortality risk reductions and the distribution of impacts across those who are advantaged and disadvantaged. 
 
06/24/2020

June 24, 2020
By James K. Hammitt

Benefit-cost analysis (BCA) is loosely interpreted as a method for determining whether a policy is ‘in the public interest’. More formally, BCA measures the effect of a policy change on each individual’s wellbeing as a monetary value and sums these values over the population. If the sum is positive, the policy change is declared a potential Pareto improvement, meaning the change plus some set of cost-free money transfers would be Pareto superior to the status quo (or other comparator).
 
06/10/2020

June 10, 2020
By: Clayton Masterman

More than 450,000 Americans died of an opioid overdose between 1999 and 2018. There were fifteen fatal opioid overdoses for every 100,000 individuals in 2018, a ratio five times greater than in 1999. While public health researchers and policymakers have rightly turned their attention toward remedying the global coronavirus pandemic, the U.S. opioid epidemic continues to take lives. In my dissertation, An Empirical Analysis of Policy Responses to the Opioid Epidemic, I analyzed the effect of various state and federal interventions to reduce opioid abuse and overdoses. This analysis can contribute to the benefit-cost analysis of policies that aim to decrease opioid consumption and overdose deaths.

 
05/01/2020

May 1, 2020

 

By: Ross Guest

Economic management in Australia has effectively been outsourced to health experts. Political and business leaders are deferring exclusively to public health advice about how to contain the COVID-19 virus with no serious public discussion of the economic costs.

 

04/23/2020

April 23, 2020

By: Dan Acland

On the 26th of March, the Associated Press reported that, "Gov. Andrew Cuomo of New York has said that if all of his sweeping, expensive measures to stem the coronavirus saved one life, it would be worth it." This surely must be hyperbole, but he has also said, "We’re not going to accept a premise that human life is disposable… And we’re not going to put a dollar figure on human life." At the same time, it seems that there is an increasing call in public discourse for a sensible weighing of the pros and cons of "lockdown" measures, which I suspect anyone reading this blog would agree is a necessary component of good decision making. If Cuomo's sentiment about the value of life is shared among decision makers and the public, how do we get our benefit-cost message across in an effective way, that can actually improve the quality of public decision making, at this particular moment, in this particular context?

04/20/2020

April 20, 2020

By: Kelly Maguire

The U.S. Environmental Protection Agency (EPA) has a long history of providing comprehensive guidance for conducting economic analyses, including benefit-cost analyses for environmental regulations. Much of that guidance is distilled in the EPA’s Guidelines for Preparing Economic Analyses, which was first released in 1983. The Guidelines are a mix of theory, empirical evidence, and practical recommendations and directives for ensuring the agency is providing the best available economic science for policy makers to consider when making decisions about regulatory actions.

03/30/2020

By: Craig Thornton

Being in the SBCA is great because it connects me with so many very smart people who care about public policy and benefit-cost analysis. This value was illustrated by the rapid rate at which the SBCA network began to exchange ideas and estimates about the benefits and costs of interventions to address the COVID-19 situation. As these ideas start to work their way into the more general media, I wanted to share a few observations with readers of On Balance about the challenges facing our community in conducting and interpreting these benefit-cost analyses.

First, given how little we know about COVID-19, the first set of analyses will be preliminary and reflect a higher level of imprecision than analyses of diseases and interventions where we have more history. Nevertheless, these initial responses are essential for informing public policy. Policy makers are going to have to make decisions. They should have the benefit of the best available analyses, even if those analyses will get more accurate as the underlying estimates and assumptions used to produce them. The key here is to inform current decision-making and to then update the analyses as more evidence becomes available in order to inform future decision making.

 
03/19/2020

March 19, 2020

By: Michael Pesko

Currently, e-cigarette supporters and opponents are passionately debating what regulations to impose on the products, if any. These debates have been playing out in legislative chambers across the United States, ranging from city halls to Congress, and in federal agencies including the Food and Drug Administration (FDA). Proponents who argue for no or little regulation maintain that e-cigarettes save lives by helping people quit smoking. Opponents, meanwhile, argue that e-cigarettes themselves are addicting teenagers to nicotine.

02/27/2020

February 27, 2020

By: Doramas Jorge-Calderón

How much impact is your economic appraisal leaving out?” This is the perennial question that CBA practitioners face when putting forward their results of, normally, a poorly performing project. In investment appraisal, my area of work, the question is often decisive. I presume the same applies to CBA practice in policy appraisal.
 

02/12/2020

 

February 12, 2020

By: Glenn Blomquist

Outer space probes, radio telescopes, large particle accelerators, genomic platforms, and similar entities are fascinating focal points of intellectual curiosity and discovery.  While we marvel at what we learn from them, we can be taken aback by their costs.  The $150 billion cost for the International Space Station has been shared by taxpayers in the United States, Europe, Russia, Japan, and Canada.  The Large Hadron Collider near Geneva, Switzerland that enabled the 2012 discovery of the elusive Higgs Boson is estimated to cost about 13.5 billion Euros over the 1993-2025 period for taxpayers in the participating countries.  According to a recent article in The Economist, proposals are being made to build new infrastructures: A Future Circular Collider in Switzerland, an International Linear Collider in Japan, and a Circular Electron-Position Collider in China. Such are the topic of Massimo Florio’s book, Investing in Science: Social Cost-Benefit Analysis of Research Infrastructures.  In it, he demonstrates that benefit-cost analysis (BCA) can be useful in answering the question:  Are these costly research infrastructures worth it?  He draws upon his substantial experience to adapt the traditional framework to the specific characteristics of research infrastructure (RI).  He identifies elements common to RIs, describes how they can be measured and valued, and gives examples from work that he and others have done. This pioneering book fills a gap in that such large-scale investments in science only infrequently have been evaluated using BCA.

01/29/2020

January 29, 2020

By: David L. Weimer

Sometimes conferences actually do stimulate research that otherwise might not be done. Six years ago, I was enjoying a breakfast conversation at the SBCA annual research conference with our immediate past president, Clark Nardinelli. At that time, he was overseeing the Regulatory Impact Analysis (RIA) of Federal Drug Administration (FDA) rules implementing the Food Safety Modernization Act, which included provisions to reduce the risks posed to people and pets from adulterated pet food. He complained that, unlike the case of human mortality risks, he had no sound basis for monetizing changes in mortality risks for dogs and other pets. As dogs do not freely make tradeoffs between risks and wages in labor markets, I suggested that finding a value of statistical dog life would likely require a contingent valuation study. Would his unit provide the approximately $50 thousand dollars needed to do the contingent valuation survey? Unfortunately, he had nothing but praise for the suggestion.

01/08/2020

January 8, 2020

By: Fran Sussman

So, you've done this great research, had this novel idea, attended a phenomenal event, or read a paradigm-shifting book, and you want to enlighten everyone in the benefit-cost analysis community.

Yes, we absolutely want your blog at the Society for Benefit-Cost Analysis.

12/11/2019

December 11, 2019

By: Deborah Aiken

This post describes a new article forthcoming in the Journal of Benefic Cost Analysis, “When Benefit-Cost Analysis Becomes Optional: Regulatory Analysis at the Consumer Product Safety Commission in the CPSIA Era.” The article describes a familiar scenario for practitioners of regulatory benefit cost analysis: a high impact event followed by swift and forceful congressional action. In the Consumer Product Safety Commission (CPSC) case, the high impact event was a series of product recalls involving toys contaminated with lead. Congress’s response was to pass the Consumer Product Safety Improvement Act (CPSIA) and require several rulemakings.

11/20/2019

November 20, 2019

By: Scott Farrow and Detlof von Winterfeldt

Applying benefit-cost analysis to homeland security regulations and related applications is difficult, in part due to issues in measuring security or risk avoided (Roberts, 2019; Farrow and Shapiro, 2009). The Office of University Programs within the Department of Homeland Security (DHS) asked our team of benefit-cost, decision, and risk analysts to evaluate changes in their security practices based on DHS funded research and development (R&D) projects over the last 15 years. Initial results have been published in von Winterfeldt, et al. (2019) with additional submissions planned for peer reviewed journals. 

10/09/2019

October 9, 2019

By: Daniel R. Pérez

Policymakers are called to act in the present to protect the public against future risks while operating under the constraints of doing so in an economically efficient yet effective manner. Unfortunately, these risks tend to present the most difficulty for traditional analytical tools in support of policymaking. This post describes a recently published article, “Dynamic Benefit-Cost Analysis for Uncertain Futures,” co-authored with Susan E. Dudley, Brian F. Mannix, and Christopher Carrigan as part of the open access Symposium on Analysis for Uncertain Futures in the Journal of Benefit Cost Analysis. The article explores the challenges “uncertain futures” pose for analytical tools to satisfactorily support policymaking and proposes the use of “dynamic benefit-cost analysis” frameworks as a necessary approach to address these challenges.