The Use of Cost-Benefit Analysis in Regulatory Decision-Making is Proving Harmful to Public Health

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The New York Academy of Sciences




An evaluation of the use of cost-benefit analysis in regulatory decision-making on health, safety and environmental problems that I recently completed for the Administrative Conference of the United States’ has led me to three major findings:

(1) Cost-benefit analysis is a “numbers game” that is used to oppose regulatory actions that have been proposed to protect public health and the environment. Using an inadequate analytic approach, cost-benefit analysis, various officials and their consultants are in case often case arbitrarily valuing human life and otherwise “pushing the numbers” to produce results that are then used to demonstrate that saving human lives from certain health hazards is outweighed by the costs to industry.

(2) In their efforts to obstruct agency action to protect public health, certain federal officials in the Executive Office use cost-benefit analysis results outside of the legally defined procedures used by the agencies. Executive Office personnel commonly engage in ex parte contacts with agency decision-makers and improperly influence the agencies. This practice also obstructs judicial review and other devices for holding agencies accountable to their statutory mandates.

(3) Other, more appropriate types of analysis can be developed to bring economic considerations into agency decision-processes. Agency officials should be allowed to establish goals for the reduction of risks to human health on the basis of information available on proven health hazards and available risk-reducing technologies, and thereafter choose the most cost-effective means of achieving such goals. This cost-effective approach satisfies both humanitarian and economic efficiency criteria. It is markedly different from the cost-benefit approach which sets health goals on the basis of determining whether the value of the lives to be saved exceeds the cost to industry.

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