Abstract

http://ssrn.com/abstract=1989202
 
 

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Well-Being Analysis vs. Cost-Benefit Analysis


John Bronsteen


Loyola University Chicago School of Law

Christopher J. Buccafusco


Illinois Institute of Technology - Chicago-Kent College of Law

Jonathan S. Masur


University of Chicago - Law School

January 20, 2012

62 Duke Law Journal 1603 (2013)
Chicago-Kent College of Law Research Paper No. 2013-05

Abstract:     
Cost-benefit analysis is the primary tool used by policymakers to inform administrative decisionmaking. Yet its methodology of converting preferences (often hypothetical ones) into dollar figures, then using those dollar figures as proxies for quality of life, creates systemic errors so large as to deprive the tool of value. These problems have been lamented by many scholars, and recent calls have gone out from world leaders and prominent economists to find an alternative analytical device that would measure quality of life more directly. This Article proposes well-being analysis (WBA) as that alternative. Relying on data from the field of hedonic psychology that tracks people’s actual experience of life — data that has consistently survived scrutiny by passing the social science tests of reliability and validity — WBA is able to provide the same policy guidance as CBA without CBA’s distortionary conversion of preferences to dollars. We show how WBA can be implemented, and we catalog exhaustively its superiority over CBA. In light of this comparison, we conclude that there is no reason for CBA to continue as the decisionmaking tool of choice for administrative regulation.

Number of Pages in PDF File: 88

Keywords: cost-benefit analysis, regulation, EPA, welfare, well-being, happiness, life satisfaction, risk, value of life, willingness to pay, QALY

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Date posted: January 22, 2012 ; Last revised: March 18, 2014

Suggested Citation

Bronsteen, John and Buccafusco, Christopher J. and Masur, Jonathan S., Well-Being Analysis vs. Cost-Benefit Analysis (January 20, 2012). 62 Duke Law Journal 1603 (2013); Chicago-Kent College of Law Research Paper No. 2013-05. Available at SSRN: http://ssrn.com/abstract=1989202 or http://dx.doi.org/10.2139/ssrn.1989202

Contact Information

John Bronsteen (Contact Author)
Loyola University Chicago School of Law ( email )
Chicago, IL 60611
United States
312-654-1511 (Phone)
312-915-7201 (Fax)
HOME PAGE: http://www.luc.edu/law/faculty/bronsteen.shtml

Christopher J. Buccafusco
Illinois Institute of Technology - Chicago-Kent College of Law ( email )
565 W. Adams St.
Chicago, IL 60661-3691
United States
312-906-5163 (Phone)

Jonathan S. Masur
University of Chicago - Law School ( email )
1111 E. 60th St.
Chicago, IL 60637
United States
773.702.5188 (Phone)
HOME PAGE: http://www.law.uchicago.edu/faculty/masur/
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