On the Accuracy of Reglatory Cost Estimates

Over the past several decades, the U.S. has seen  a gradual reduction in economic regulation and a simultaneous increase in  safety, health, environmental, and other social regulations. As these social  regulations continue to expand, there is growing concern about the costs,  effectiveness, and benefits of these rules. While prospective or ex ante  analyses of the benefits and costs of major federal regulations are now a standard  part of government operations, retrospective or ex post analyses, focusing on  measurements of actual results, remain rare. Despite encouragement from the  National Academy of Sciences and others, and a recent presidential executive  order promoting retrospective analysis by federal agencies, many challenges  hinder development of reliable, comprehensive measures of the performance of  regulations and regulatory programs. The available ex post analyses often focus  on inappropriate metrics, use data that are subject to selection bias, and rely  on questionable baseline assumptions.This paper examines the evidence on  retrospective analysis and proposes a way forward.

Speaker: Dick Morgenstern, Resources for the Future