Attention to Distribution in U.S. Regulatory Analyses

Abstract

Before promulgating a major environmental, health, or safety regulation, U.S. government agencies are generally expected to analyze the distribution of its impacts as well as its total costs and benefits. We review several regulatory analyses to determine whether this expectation is being met. We find that agencies’ analyses provide little information on distributional impacts. Often they note only that the regulation will not adversely affect the health of children, minorities, or low-income groups. This lack of attention to distribution may be philosophical, with regulators believing they should choose the option that maximizes net benefits as long as the health of these groups is not harmed. It may also be motivated by pragmatic reasons, including concerns about political and legal implications; an assumption that distributional impacts are small; or data, time, and resource constraints. We argue that this focus on the possibility of health-related losses, and the lack of analysis of the full distribution of both benefits and costs, is problematic. However, the feasibility and desirability of more extensive and rigorous distributional analysis remains unclear. Further research is needed to increase our understanding of the distribution of both costs and benefits and to determine whether the benefits of requiring routine provision of such information would outweigh the costs entailed.

JEL codes

Reprinted as

Reference

James K. Hammitt, Lisa A. Robinson, and Richard Zeckhauser, “Attention to Distribution in U.S. Regulatory Analyses”, Review of Environmental Economics and Policy, vol. 10, n. 2, September 2016, pp. 308–328.