Perpetuating Puffery: An Analysis of the Composition of OMB's Reported Benefits of Regulation
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The Office of Management and Budget reports that the benefits of regulations issued over the last decade exceed the costs by an order of magnitude. But how accurate are those estimates? Over 80 percent of total reported regulatory benefits derive from three sources: (1) reductions of fine particles in the air as a direct result of regulation, (2) the co-benefits achieved from ancillary reductions in these particles as an indirect result of regulation, and (3) private savings for which agencies have offered no market failure explanation. This article critically examines the approaches and assumptions behind these estimates, and suggests that the reported benefits should be viewed with some skepticism.
Keywordsregulation social benefits benefit‐cost analysis economic measurement environmental protection Office of Management and Budget Environmental Protection Agency
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