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News & Analysis | REG•WATCH Blog | Press Room
Wednesday, December 05, 2007
The Flaws of Cost-Benefit Analysis: A Case Example
Reg•Watch often complains about the flaws of cost-benefit analysis and the overemphasis policy makers place on it as a tool in decision making. However, when discussing cost-benefit analysis in the abstract, it is difficult to show the practical problems associated with its use.
For a case example showing just how problematic cost-benefit analysis can be, read OMB Watch's new analysis, Polluted Logic: How EPA's ozone standard illustrates the flaws of cost-benefit analysis in regulatory decision making.
Polluted Logic tracks EPA's current revision of the national standard for ozone and shows how the use of cost-benefit analysis in the rulemaking has been useless to policy makers and has only complicated the debate over whether to tighten the standard.
As the paper discusses, EPA's ozone standard serves as a case example of some of the big problems with cost-benefit analysis in regulatory decision making:
- Cost-benefit analysis is problematic for health, environment, civil rights, and safety rulemakings because of the magnitude of intangible and invaluable benefits;
- Cost-benefit analysis often runs counter to congressional intent expressed in federal law; and
- Cost-benefit analysis allows the White House Office of Information and Regulatory Affairs to manipulate regulations to serve an intended ideological agenda.
Download the paper here: Polluted Logic: How EPA's ozone standard illustrates the flaws of cost-benefit analysis in regulatory decision making.
Posted by Matt Madia
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