The Benefits and Costs of Automotive Regulations for Low-Income Americans

Benefit-cost analyses of regulations address Kaldor-Hicks efficiency but rarely investigate the distribution of benefits and costs as experienced by low-income households. In order to fill this gap, this article assembles the available evidence to determine how regulations of the automobile industry may impact the well-being of low-income Americans. The scope of the investigation includes air pollution, safety and fuel-economy regulations. We find that performing benefit-cost analyses for low-income households is more challenging than commonly understood. Given the difficulties in completing distributional analysis with available information, the authors offer practical suggestions on how to change the federal data systems and the rulemaking process to ensure that information is collected about how future automobile regulations impact the well-being of the poor.

The Cost-Benefit Fallacy: Why Cost-Benefit Analysis Is Broken and How to Fix It

Most cost-benefit analyses assume that the estimates of costs and benefits are more or less accurate and unbiased. But what if, in reality, estimates are highly inaccurate and biased? Then the assumption that cost-benefit analysis is a rational way to improve resource allocation would be a fallacy. Based on the largest dataset of its kind, we test the assumption that cost and benefit estimates of public investments are accurate and unbiased. We find this is not the case with overwhelming statistical significance. We document the extent of cost overruns, benefit shortfalls, and forecasting bias in public investments. We further assess whether such inaccuracies seriously distort effective resource allocation, which is found to be the case. We explain our findings in behavioral terms and explore their policy implications. Finally, we conclude that cost-benefit analysis of public investments stands in need of reform and we outline four steps to such reform.

Methodological Challenges in Estimating the Lifetime Medical Care Cost Externality of Obesity

There is a great deal of variability in estimates of the lifetime medical care cost externality of obesity, partly due to a lack of transparency in the methodology behind these cost models. Several important factors must be considered in producing the best possible estimate, including age-related weight gain, differential life expectancy, identifiability, and cost model selection. In particular, age-related weight gain represents an important new component to recent cost estimates. Without accounting for age-related weight gain, a study relies on the untenable assumption that people remain the same weight throughout their lives, leading to a fundamental misunderstanding of the evolution and development of the obesity crisis. This study seeks to inform future researchers on the best methods and data available both to estimate age-related weight gain and to accurately and consistently estimate obesity’s lifetime external medical care costs. This should help both to create a more standardized approach to cost estimation as well as encourage more transparency between all parties interested in the question of obesity’s lifetime cost and, ultimately, evaluating the benefits and costs of interventions targeting obesity at various points in the life course.

Incidence and Costs of Personal and Property Crimes in the USA, 2017

Total cost estimates for crime in the USA are both out-of-date and incomplete. We estimated incidence and costs of personal crimes (both violent and non-violent) and property crimes in 2017. Incidence came from national arrest data, multi-state estimates of police-reported crimes per arrest, national victimization and road crash surveys, and police underreporting studies. We updated and expanded upon published unit costs. Estimated crime costs totaled $2.6 trillion ($620 billion in monetary costs plus quality of life losses valued at $1.95 trillion; 95 % uncertainty interval $2.2–$3.0 trillion). Violent crime accounted for 85 % of costs. Principal contributors to the 10.9 million quality-adjusted life years lost were sexual violence, physical assault/robbery, and child maltreatment. Monetary expenditures caused by criminal victimization represent 3 % of Gross Domestic Product – equivalent to the amount spent on national defense. These estimates exclude the additional costs of preventing and avoiding crime such as enhanced lighting and burglar alarms. They also exclude crimes against businesses and most white-collar and corporate offenses.

Benefit–Cost Analysis of Social Media Facilitated Bystander Programs

Bystander programs contribute to crime prevention by motivating people to intervene in violent situations. Social media allow addressing very specific target groups, and provide valuable information for program evaluation. This paper provides a conceptual framework for conducting benefit–cost analysis of bystander programs and puts a particular focus on the use of social media for program dissemination and data collection. The benefit–cost model treats publicly funded programs as investment projects and calculates the benefit–cost ratio. Program benefit arises from the damages avoided by preventing violent crime. We provide systematic instructions for estimating this benefit. The explained estimation techniques draw on social media data, machine-learning technology, randomized controlled trials and discrete choice experiments. In addition, we introduce a complementary approach with benefits calculated from the public attention generated by the program. To estimate the value of public attention, the approach uses the bid landscaping method, which originates from display advertising. The presented approaches offer the tools to implement a benefit–costs analysis in practice. The growing importance of social media for the dissemination of policy programs requires new evaluation methods. By providing two such methods, this paper contributes to evidence-based decision-making in a growing policy area.

Cost–Benefit Assessment of Public Investments in France: The Use of Counter-Experts

Socioeconomic evaluation of a public investment helps to understand its value for the community, and it also improves an investment by analyzing its different components, and the risks inherent in its completion. The Act of 31 December 2012 about Public Finance Planning makes it mandatory in France for project sponsors to conduct an ex-ante socioeconomic evaluation of all public civil investments made by the State and its public institutions. An independent counter-expert assessment of the ex-ante socioeconomic evaluation is conducted for the largest projects. A permanent committee of experts has been established to specify the methodological rules for socioeconomic evaluation and define the studies and research necessary.

Poverty, Irrationality, and the Value of Cash Transfers

It has been demonstrated that irrationality reduces the efficiency of individuals’ allocations, as measured by their “true” or rational preferences. There is also evidence that poverty increases irrationality of different sorts. As a result, the net benefit to society of a cash transfer from taxpayers to welfare recipients may not be zero. The fact that the transfer will be allocated less efficiently by the recipients than by the taxpayers will reduce the value of the transfer, while if the transfer increases recipients’ rationality, it will increase the efficiency of the allocation of their pretransfer budgets, thus increasing the value of the transfer. The net effect on society will be positive or negative, depending in large part on the degree to which the transfer increases rationality. I model these effects in the context of present-biased preferences and explore the effect of irrationality, income, and the size of transfer on the value of transfers. I conclude that under a plausible range of conditions, transfers can generate a substantial positive net benefit. I also model the choices of a fully rational paternalist and find little support for paternalistic in-kind transfers.