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Monday, September 20, 2004

Cost-benefit analysis: still so very wrong

Three studies were widely reported in the press and converted into political and scholarly gospel for what they purportedly proved with unassailable quantitative analysis: that government regulation of the public interest is ultimately irrational, as regulations’ costs exponentially outpaced their benefits. In more recent years, Professors Lisa Heinzerling and Richard Parker have scrutinized those studies, claim by claim, number by number, and discovered methodological flaws and biases so severe that the studies should be dumped on the junk science trash heap once and for all.

Authors of two of those discredited anti-regulatory screeds — Robert Hahn of the AEI-Brookings Joint Center and John Morrall of OMB’s Office of Information and Regulatory Affairs — have fired back at the critiques of their work. A new article by Richard Parker reveals, however, that these replies fail to defend the discredited studies. In some instances, the arguments actually raise yet new concerns about the bias of the earlier studies.

Richard W. Parker, "Is Government Regulation Irrational?: A Reply to Morrall and Hahn" (Sep. 2004). Read the abstract or download the article.

Posted by Robert Shull