Viscusi Circular A-4 Peer Review Comments

Abstract

This working paper provides commentary on my 2023 peer review panel comments on the 2023 Office of Management and Budget (OMB) Circular A-4. The Prologue section introduces my official peer review comments and indicates how the structure of my comments was tailored to the guidelines established by the OMB. The main section consists of my 2023 peer review comments as they were submitted to OMB. I recommended changes in the draft Circular A-4 to increase the discount rate from the 1.7% rate that OMB proposed, to report domestic benefits whenever global benefits are reported, to adopt a behavioral transfer test for use of behavioral economics findings, to update the procedures for estimating the value of a statistical life, and to abandon the proposed distributional weights. The Epilogue to my comments summarizes how the final version of Circular A-4 differs from the draft. The most problematic component of the new Circular A-4 is the OMB distributional weights, which will transform the role of benefit-cost analyses.   

Keywords: Circular A-4, regulation, benefit-cost analysis, value of a statistical life, behavioral economics

JEL Classification: K32, D61, H23, I30