In defense of the economic analysis of regulation /

Hahn (executive director, AEI-Brookings Joint Center for Regulatory Studies) offers a vigorous but balanced defense of applying economic analysis to regulatory decision making. Economic analysis is cost-benefit analysis (CBA), the quantification of costs and benefits for any project or regulation. This work focuses on regulations pertaining to environmental, health, and safety issues (e.g., asbestos, airbags, food labeling, and children's sleepwear). Supporters, Hahn included, admit that CBA is difficult, while critics charge that CBA is fundamentally flawed. Hahn responds to each criticism raised about CBA, displaying commendable balance and sense. His main points are that CBA must be used (there is no alternative), that it can be improved, and that critics are sometimes right but often wrong. Hahn does not present new forms of analysis or apply CBA to unanalyzed regulations. He also omits discussion of politics, e.g., that Congress (to be reelected) and the president must be perceived as "doing something" about a problem without regard to cost. Overall, this publication is a clear, thoughtful, and persuasive defense of the use of CBA. It contains 55 pages of footnotes. This monograph can also be viewed online or downloaded . ^BSumming Up: Highly recommended. General readers; students, lower-division undergraduate and up; faculty and researchers. R. A. Miller Wesleyan University