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Attention to Distribution in U.S. Regulatory Analyses

Author

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  • Lisa A. Robinson
  • James K. Hammitt
  • Richard J. Zeckhauser
Abstract
Before promulgating a major environmental, health, or safety regulation, U.S. government agencies are generally expected to analyze the distribution of its impacts as well as its total costs and benefits. We review several regulatory analyses to determine whether this expectation is being met. We find that agencies’ analyses provide little information on distributional impacts. Often they note only that the regulation will not adversely affect the health of children, minorities, or low-income groups. This lack of attention to distribution may be philosophical, with regulators believing they should choose the option that maximizes net benefits as long as the health of these groups is not harmed. It may also be motivated by pragmatic reasons, including concerns about political and legal implications; an assumption that distributional impacts are small; or data, time, and resource constraints. We argue that this focus on the possibility of health-related losses, and the lack of analysis of the full distribution of both benefits and costs, is problematic. However, the feasibility and desirability of more extensive and rigorous distributional analysis remains unclear. Further research is needed to increase our understanding of the distribution of both costs and benefits and to determine whether the benefits of requiring routine provision of such information would outweigh the costs entailed.

Suggested Citation

  • Lisa A. Robinson & James K. Hammitt & Richard J. Zeckhauser, 2016. "Attention to Distribution in U.S. Regulatory Analyses," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 10(2), pages 308-328.
    • Handle: RePEc:oup:renvpo:v:10:y:2016:i:2:p:308-328.
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    References listed on IDEAS

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    1. Congressional Budget Office, 2011. "Trends in the Distribution of Household Income Between 1979 and 2007," Reports 42729, Congressional Budget Office.
    2. Robinson Lisa A. & Hammitt James K., 2013. "Skills of the trade: valuing health risk reductions in benefit-cost analysis," Journal of Benefit-Cost Analysis, De Gruyter, vol. 4(1), pages 107-130, March.
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    8. Marc Fleurbaey & Rossi Abi-Rafeh, 2016. "The Use of Distributional Weights in Benefit–Cost Analysis: Insights from Welfare Economics," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 10(2), pages 286-307.
    9. Congressional Budget Office, 2011. "Trends in the Distribution of Household Income Between 1979 and 2007," Reports 42729, Congressional Budget Office.
    10. Hammitt James K. & Robinson Lisa A, 2011. "The Income Elasticity of the Value per Statistical Life: Transferring Estimates between High and Low Income Populations," Journal of Benefit-Cost Analysis, De Gruyter, vol. 2(1), pages 1-29, January.
    11. Richard E, Just & Darrell L. Heuth & Andrew Schmitz, 2004. "The Welfare Economics of Public Policy," Books, Edward Elgar Publishing, number 3342.
    12. Hammitt James K. & Robinson Lisa A, 2011. "The Income Elasticity of the Value per Statistical Life: Transferring Estimates between High and Low Income Populations," Journal of Benefit-Cost Analysis, De Gruyter, vol. 2(1), pages 1-29, January.
    13. Zeckhauser, Richard J, 1971. "Optimal Mechanisms for Income Transfer," American Economic Review, American Economic Association, vol. 61(3), pages 324-334, June.
    14. Congressional Budget Office, 2011. "Trends in the Distribution of Household Income Between 1979 and 2007," Reports 42729, Congressional Budget Office.
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    Cited by:

    1. Hammitt, James K., 2020. "Accounting for the distribution of benefits & costs in benefit-cost analysis," TSE Working Papers 20-1116, Toulouse School of Economics (TSE).
    2. Aldy, Joseph E., 2022. "Learning How to Build Back Better through Clean Energy Policy Evaluation," RFF Working Paper Series 22-15, Resources for the Future.
    3. Hammitt, James K. & Treich, Nicolas, 2021. "Fatality Risk Regulation," TSE Working Papers 21-1177, Toulouse School of Economics (TSE).
    4. Adam M. Finkel & George Gray, 2018. "Taking the reins: how regulatory decision-makers can stop being hijacked by uncertainty," Environment Systems and Decisions, Springer, vol. 38(2), pages 230-238, June.
    5. Marc Fleurbaey & Rossi Abi-Rafeh, 2016. "The Use of Distributional Weights in Benefit–Cost Analysis: Insights from Welfare Economics," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 10(2), pages 286-307.
    6. Bakkensen, Laura A. & Ma, Lala, 2020. "Sorting over flood risk and implications for policy reform," Journal of Environmental Economics and Management, Elsevier, vol. 104(C).
    7. Carl F. Cranor & Adam M. Finkel, 2018. "Toward the usable recognition of individual benefits and costs in regulatory analysis and governance," Regulation & Governance, John Wiley & Sons, vol. 12(1), pages 131-149, March.
    8. Dale Whittington & Richard T. Carson & Thomas Sterner, 2023. "Policy Note: Benefit Cost Analysis of Water Investments in the Anthropocene," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 9(03), pages 1-23, July.
    9. Cary Coglianese & Shana M. Starobin, 2020. "Social Science and the Analysis of Environmental Policy," Review of Policy Research, Policy Studies Organization, vol. 37(5), pages 578-604, September.
    10. Matthew D. Adler, 2016. "Editor's Choice Benefit–Cost Analysis and Distributional Weights: An Overview," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 10(2), pages 264-285.
    11. Acland, Daniel & Greenberg, David H., 2023. "The Elasticity of Marginal Utility of Income for Distributional Weighting and Social Discounting: A Meta-Analysis," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 14(2), pages 386-405, July.

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