Tuesday, March 04, 2008
ECON 260: The Federal Perspective on Cost-Benefit Analysis
The OMB guidelines are divided into an introduction and three sections: (1) a statement of the need for the proposed action; (2) an examination of alternative approaches; and (3) analysis of benefits and costs. The introduction states that an Economic analysis (EA) should provide sufficient information for decisionmakers to determine:Click the link to see them discussed in (slightly) more detail.
there is adequate information demonstrating a need for and the consequences of the proposed regulatory action, the potential benefits justify the potential costs, considering that not all benefits can be expressed in monetary terms, the proposed action will maximize net benefits to society, unless a statute mandates another approach, where a statute mandates a specific approach, the proposed action will be the most cost-effective, and agency decisions are based on the best reasonably available scientific, technical economic and related information.
"if the potential benefits justify the costs" and "benefits to society are maximized."
I find it remarkable that government spending attempts to be so precise in the area of environmental protection but is completely inefficient in many other arenas (see: national defense, education). Shouldn't we be more cavalier with our money when it comes to protecting the environment?
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