Quantifying Regulatory Benefits
This Essay makes three principal claims. First, it shows that breakeven analysis is a useful technique for adding structure to costbenefit analysis when a regulatory benefit has not been quantified. In particular, breakeven analysis can sometimes address the judicial hostility to using nonquantified benefits as trumps. But it is a secondbest approach because actually quantifying the benefit can provide far more useful information to the regulatory process. Second, the Essay argues that the categories of “quantifiable” and “nonquantifiable” benefits are not immutable. “Unquantifiable” benefits are simply benefits that have not yet been quantified. Over the last few decades, important categories of benefits that were once considered unquantifiable were subsequently quantified: the two most significant for current regulatory purposes are the “value of a statistical life” (VSL) and the social cost of carbon (SCC). Third, the Essay shows that the federal government has played a significant role in providing resources for the quantification of important categories of benefits and should be regarded as a catalyst for future efforts of this sort. Recent congressional threats to cut the funding for research in the social sciences are a worrisome development in this regard. As a result, the push for breakeven analysis is a salutary development unless it diverts attention and resources from the actual quantification of regulatory benefits.