I recently attended a day of cost-benefit analysis sponsored by the Institute for Policy Integrity at NYU. I saw an analysis of residential oil-burning boilers that was used to successfully advocate for a change in regulation. As a result New york will be moving to cleaner grades of oil across the board in the next year. It required 9-months of work by at least one economist, which is a small price to pay for all the potential lives saved.
People have strong reactions to cost-benefit analysis. For those who advocate for human rights or social justice, the idea of placing a dollar value on a human life or the life of an animal is anathema. First of all, this is a bit reductionist, because all cost-benefit analysis does not involve the valuation of life. However, the point made by Dean Revesz, Director of IPI, was that you can note your objections to cost-benefit analysis, but you should get in on the game, because this is how a lot of decisions are made. Cost-benefit analysis is particularly useful in the environmental field and on the federal level for the simple reason that environmental regulations require the preparation of a cost-benefit analysis. The effected industries prepare and present them, and effected communities and concerned citizens should too.