Windmills and Holy Grails

NYU Journal of Legislation and Public Policy, 2016

Temple University Legal Studies Research Paper No. 2016-35

11 Pages Posted: 27 Jun 2016 Last revised: 21 Jul 2016

Amy Sinden

Temple University - James E. Beasley School of Law; Center for Progressive Reform

Date Written: June 12, 2016

Abstract

Professor Richard Pierce suggests that skeptics of cost-benefit analysis (CBA) stop “tilting at windmills.” He creates the impression that there is a widespread consensus in support of CBA across all three branches of government that includes “all nine Justices of the Supreme Court” and even the most liberal members of Congress. This is a misleading picture, but to understand why, it is important to define key terms. CBA comes in many varieties, only the most formal of which typically draw criticism from skeptics. Additionally, consideration of costs can refer to a broad array of regulatory assessment methods that includes but is not limited to CBA. Thus, when all nine Justices equate reasonable regulation with consideration of costs — as they did last term in Michigan v. EPA — that’s a very different matter from the Supreme Court unanimously endorsing CBA — especially the formal variety that Professor Pierce defends. Indeed, the Court has expressed considerable skepticism about formal CBA in recent decisions — and for good reason. With information that is inevitably incomplete, formal CBA produces results that are misleading at best and hopelessly indeterminate at worst.

Keywords: cost-benefit analysis, regulation, environment

JEL Classification: K23, K32, L51

Suggested Citation

Sinden, Amy, Windmills and Holy Grails (June 12, 2016). NYU Journal of Legislation and Public Policy, 2016; Temple University Legal Studies Research Paper No. 2016-35. Available at SSRN: https://ssrn.com/abstract=2801180

Amy Sinden (Contact Author)

Temple University - James E. Beasley School of Law ( email )

1719 N. Broad Street
Philadelphia, PA 19122
United States
215-204-4969 (Phone)
215-204-1185 (Fax)

Center for Progressive Reform ( email )

500 West Baltimore Street
Baltimore, MD 21201
United States

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