Daniel A. Farber

Breaking Bad? The Uneasy Case for Regulatory Breakeven Analysis

Often regulatory benefits can be hard to quantify because they deal with harms that are not traded in markets or because the probability of harm is not well understood. Breakeven analysis offers one plausible way of addressing the problem. But it is no panacea. It may fail to improve the rationality of decisions, especially in hard cases. Alternative approaches may have greater advantages. Thus, the argument for breakeven analysis remains unproven.