Soundbites: Benefit-Cost Analysis
Scan brief descriptions of initiatives and work conducted by our center community and our decision science colleagues across the globe.
Prior to putting forth a major health, environmental, or safety regulation, government agencies in the U.S. are generally expected to analyze the distribution of its impacts as well as its total costs and benefits. This review of several regulatory analyses found that agencies’ analyses provide little information on distributional impacts.
The value of mortality risk reductions, conventionally expressed as the value per statistical life, is an important determinant of the net benefits of many government policies. This review found that few studies of illness-related risks in the United States meet criteria for good quality, although those that do yield similar values to studies of injury-related risks.
This study used a stated-preference survey fielded to an internet panel representative of the adult US population to estimate willingness to pay for small reductions in the risk of nonfatal health conditions, finding it is proportional to the stated reduction in probability of illness and is an increasing but highly concave function of the severity and duration of the illness.
In "Global Health 2035," The Lancet Commission on Investing in Health adds the value of increased life expectancy to the value of growth in GDP when assessing national well-being. This paper investigates the sensitivity of this estimate to underlying assumptions such as the effects of income, age, life expectancy, and the sequencing of calculations.
Regulatory impact analyses (RIAs) weigh the benefits of regulations against the burdens they impose and can be important and useful tools for informing decision makers. This Consumer’s Guide to Regulatory Impact Analysis offers 10 tips for non-specialist policymakers, decision makers and interested stakeholders who will be reading RIAs as consumers.
COVID-19-related policies are fraught trade-offs. This perspective article outlines how policy-makers can use economic evaluation methods to be more transparent and logical when making these difficult decisions. Read the article and listen to the author interview podcast.