Valuing Health Risks, Costs, and Benefits for Environmental Decision Making Report of a Conference (1990) / Chapter Skim
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1. Introduction
1. Introduction
Pages 3-14
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From page 3... ...
Such choices, because they involve inherently scarce resources, attach values to the consequences of the actions involved. This volume reports on the results of a conference planned and conducted by an independent committee of volunteers appointed by the National Research Council to address an important set of issues encountered in using formal approaches to valuing risks, costs, and benefits in health and safety policy making.
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From page 4... ...
The difficulty of developing explicit values for human lives extended, disabilities avoided, and others has led these agencies to search for practical yet theoretically defensible approaches to risk valuation and to benefit-cost or cost-effectiveness analysis. As a part of that effort, the committee organized a conference that surveyed recent scholarship in law, philosophy, political science, and economics and discussed what research, if any, would be likely to lead to improved regulatory decision making, particularly benefit-cost analysis.
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From page 5... ...
(2) s administrative, legal, and statutory constraints on application of benefit-cost analysis techniques; the philosophical foundations of using a common monetary metric to represent human life and health; moral issues involved in comparing health-risk benefits and costs across time and distance, such as individual and collective preferences for who should bear the burdens or benefits of risks across time and distance; the adequacy of scientific information as a basis for placing values on health risks in particular instances; and effects on regulatory policy of new research knowledge about decision making.
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From page 6... ...
The 1983 report acknowledged the reality of contemporary risk assessment by identifying areas in which gaps in scientific data and theory often appear. It proposed that agencies develop guidelines for using conservative, scientifically appropriate inferences to bridge the gaps for policy-making purposes rather than either taking ad hoc inferential leaps or postponing action until all scientific uncertainty is removed.
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From page 7... ...
For example, after evaluating the potential health risks of a pollutant or toxic substance or consumer product design, regulators may examine the costs of alternative strategies for a uniform reduction in the risk (e.g., eliminate the offending item, mitigate its effects, redesign it, or do nothing) , and then compare explicitly the costs of those alternatives.
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From page 8... ...
This requirement was used to prod agencies to explain more explicitly the likely economic effects of regulations, but no consistent agreement emerged as to how these statements would or would not be used to inform regulatory decisions. A Carter administration executive order issued in 1978 created a new interagency forum, the Regulatory Analysis Review Group (RARG)
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From page 9... ...
More specifically, notable provisions of E.O. 12291 included requirements that regulatory actions should not be undertaken unless potential benefits to society from the regulation outweigh the potential costs to society; among alternative approaches, the alternative involving least net cost to society should be chosen; and that agencies set regulatory priorities to maximize aggregate net benefits, taking into account the condition of particular industries involved.
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From page 10... ...
What are the scientific, administrative, and political sources of support for considering economic efficiency as an integral part of risk-management decisions, and what are the constraints on doing so? · How do statutes, case law, presidential directives, congressional pronouncements, and administrative practice provide guidance in the development and application of benefit-cost analysis for regulatory decisions?
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From page 11... ...
He outlines the sources of opposition to the use of analysis, as well as the mechanisms that are used by major actors-Congress, public interest groups, OMB, and the agencies-to shape general approaches and specific risk valuation practices. Melnick raises the question of whether the current legal and political context will allow for progress in integrating technical benefit-cost analysis with regulatory decision making on health and safety issues.
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From page 12... ...
Examining central paradoxes in the use of discount rates, especially with regard to the valuation of human life, he points out necessary inconsistencies in the universal application of analytic techniques for making environmental policy decisions and proposes case-specific application of such techniques. In particular, he raises problems applicable in any discussion in which not all costs of a policy are borne by the same individuals or groups as those who reap the benefits.
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From page 13... ...
He examines the empirical evidence regarding each and suggests how these findings have, are likely to, or should change the way economists view and model private and public decisions under uncertainty. On balance, Machina feels the modern models used to characterize behavioral deviation from expected utility theory are completely consistent with well-defined individual preference ordering, and hence with traditional welfare analysis.
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From page 14... ...
1982 Analysis for Public Decisions. New York: Elsevier Publishers U.S.
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