The Biases of Risk Tradeoff Analysis: Towards Parity in Environmental and Health-and-Safety Regulation

Abstract:     
Risk tradeoff analysis is in the process of transforming the practice of regulation. Its core idea is simple and intuitively appealing: Regulations undertaken to minimize or eliminate certain health risks often have the perverse effect of promoting other risks. A serious analysis of the impact of a regulation should pay attention not only to its primary effects in reducing the so-called target risk, but also to the secondary effects of the regulation in bringing about "ancillary risks" In this way, risk tradeoff analysis promises a more rational technique for the evaluation of regulation. Risk tradeoff analysis, however, focuses exclusively on the negative secondary effects of risk regulation, but systematically ignores the phenomenon of "ancillary benefits," the reductions in risk that take place in addition to-and as a direct or indirect result of -- reductions in the target risk. The resulting conclusions are therefore consistently biased against regulation. This methodological bias is, in turn, reinforced by an institutional bias that emerges when risk tradeoff analysis is applied in the administrative state. Agency inattention to ancillary effects gives rise to iterative processes of administrative oversight and judicial review that privilege the opponents of regulation. This Article sheds light on these biases and proposes a solution: ancillary benefit analysis. This technique would direct the attention of administrative decision-makers to the positive byproducts of regulation designed to promote health, safety, and the environment. At a time when risk tradeoff analysis enjoys ever-growing support in the courts and the academy, this Article proposes an approach through which to counteract its one-sidedness.

Number of Pages in PDF File: 74

Keywords: Risk Tradeoff Analysis, Ancillary Risks, Ancillary Benefits

Accepted Paper Series