Why Benefit-Cost Analysis Is Widely Disregarded and What to Do About It

Robert Dorfman
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Robert Dorfman: Department of Economics, Harvard University, Cambridge, Massachusetts 02138

Interfaces, 1996, vol. 26, issue 5, 1-6

Abstract: Three prominent shortcomings of benefit-cost analysis as currently practiced are (1) it does not identify the population segments whom the proposed measure benefits or harms, (2) it attempts to reduce all comparisons to a single dimension, generally dollars and cents, and (3) it conceals the degree of inaccuracy or uncertainty in its estimates.These defects impair the usefulness of benefit-cost studies, divert effort and attention away from the most useful information benefit-cost studies could convey, and risk misleading many readers. These faults can be corrected or avoided without much difficulty and to great benefit.

Keywords: government: regulations; cost/benefit: analysis (search for similar items in EconPapers)
Date: 1996
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