One argument against using cost-benefit analysis to justify policies aimed at promoting human life and health or protecting the environment is that it requires putting a price on priceless goods. This distorts the value of these goods, and it can affect their value by cheapening them. This argument might be rejected by a moral consequentialist who believes that a rational agent should always be able to reflect on his values, even priceless goods, and assess their costs and their importance. This (...) article defends the argument against cost-benefit analysis and suggests that a proper understanding of priceless goods shows that they also raise difficulties for consequentialist moral theories. (shrink)

Why does performing certain tasks cause the aversive experience of mental effort and concomitant deterioration in task performance? One explanation posits a physical resource that is depleted over time. We propose an alternative explanation that centers on mental representations of the costs and benefits associated with task performance. Specifically, certain computational mechanisms, especially those associated with executive function, can be deployed for only a limited number of simultaneous tasks at any given moment. Consequently, the deployment of these computational mechanisms carries (...) an opportunity cost – that is, the next-best use to which these systems might be put. We argue that the phenomenology of effort can be understood as the felt output of these cost/benefit computations. In turn, the subjective experience of effort motivates reduced deployment of these computational mechanisms in the service of the present task. These opportunity cost representations, then, together with other cost/benefit calculations, determine effort expended and, everything else equal, result in performance reductions. In making our case for this position, we review alternative explanations for both the phenomenology of effort associated with these tasks and for performance reductions over time. Likewise, we review the broad range of relevant empirical results from across sub-disciplines, especially psychology and neuroscience. We hope that our proposal will help to build links among the diverse fields that have been addressing similar questions from different perspectives, and we emphasize ways in which alternative models might be empirically distinguished. (shrink)

This paper discusses the practice of cost-benefit analyses of transportation infrastructure investment projects from the meta-theoretical perspective of critical realism. Such analyses are based on a number of untenable ontological assumptions about social value, human nature and the natural environment. In addition, main input data are based on transport modelling analyses based on a misleading `local ontology' among the model makers. The ontological misconceptions translate into erroneous epistemological assumptions about the possibility of precise predictions and the validity of willingness-to-pay investigations. (...) Accepting the ontological and epistemological assumptions of cost-benefit analysis involves an implicit acceptance of the ethical and political values favoured by these assumptions. Cost-benefit analyses of transportation investment projects tend to neglect long-term environmental consequences and needs among population groups with a low ability to pay. Instead of cost-benefit analyses, impact analyses evaluating the likely effects of project alternatives against a wide range of societal goals is recommended, with quantification and economic valorisation only for impact categories where this can be done in an ontologically and epistemologically defensible way. (shrink)

This paper conducts a cost–benefit analysis of Australia’s Covid-19 lockdown strategy relative to pursuit of a mitigation strategy in March 2020. The estimated additional deaths from a mitigation strategy are 11,500 to 40,000, implying a Cost per Quality Adjusted Life Year saved by locking down of at least 11 times the generally employed figure of $100,000 for health interventions in Australia. The lockdowns do not then seem to have been justified by reference to the standard benchmark. Consideration of the (...) information available to the Australian government in March 2020 yields a similar ratio and therefore the same conclusion that lockdown was not warranted. If Australia experiences a new outbreak, and cannot contain it without resort to a nationwide lockdown, the death toll from adopting a mitigation strategy at this point would be even less than had it done so in March 2020, due to the vaccination campaign, lessons learned since March 2020, and because the period over which the virus would then inflict casualties would now be much less than the period from March 2020. This would favour a mitigation policy even more strongly than in March 2020. This approach of assessing the savings in quality adjusted life years and comparing them to a standard benchmark figure ensures that all quality adjusted life years saved by various health interventions are treated equally, which accords with the ethical principle of equity across people. (shrink)

A recurring question about cost - benefit analysis concerns its scope. CBA is a decision-making method frequently employed in environmental policy-making, in which things which have no market price are treated as if they were commodities. They are given a monetary value, a form of price. But it is widely held that some things cannot be meaningfully priced, thus substantially limiting the scope of CBA. The aim of this paper is to test some aspects of this broad claim, focusing on (...) problems of incomparability and incommensurability. In particular, the role of rough equality as a putative form of comparison is investigated. I argue that while an assessment of the full significance of rough equality for practical decision-making awaits resolution of a number of important technical questions, it does not provide a strong enough form of comparison to support CBA. (shrink)

Cost-benefit analysis is commonly understood to be intimately connected with utilitarianism and incompatible with other moral theories, particularly those that focus on deontological concepts such as rights. We reject this claim and argue that cost-benefit analysis can take moral rights as well as other non-utilitarian moral considerations into account in a systematic manner. We discuss three ways of doing this, and claim that two of them (output filters and input filters) can account for a wide range of rights-based moral theories, (...) including the absolute notions of moral rights proposed by Hayek, Mayo, Nozick, and Shue. We also discuss whether the use of output filters and input filters can be generalized to cover other non-utilitarian theories, such as Kantian duty ethics and virtue ethics. (shrink)

Cost-benefit analysis is a widely used governmental evaluation tool, though academics remain skeptical. This volume gathers prominent contributors from law, economics, and philosophy for discussion of cost-benefit analysis, specifically its moral foundations, applications and limitations. This new scholarly debate includes not only economists, but also contributors from philosophy, cognitive psychology, legal studies, and public policy who can further illuminate the justification and moral implications of this method and specify alternative measures. These articles originally appeared in the Journal of Legal Studies. (...) Contributors: - Matthew D. Adler - Gary S. Becker - John Broome - Robert H. Frank - Robert W. Hahn - Lewis A. Kornhauser - Martha C. Nussbaum - Eric A. Posner - Richard A. Posner - Henry S. Richardson - Amartya Sen - Cass R. Sunstein - W. Kip Viscusi. (shrink)

Should India build a new steel mill, or London an urban motorway? Should higher education expand, or water supplies be improved? These are typical questions about which cost-benefit analysis has something to say. It is the main tool that economics provides for analysing problems of social choice. It also provides a useful vehicle for understanding the practical value of welfare economics. This new book of readings covers all the main problems that arise in a typical cost-benefit exercise. It is entirely (...) up-to-date, reflecting the most recent research in the area. Part I covers the main theoretical issues affecting cost-benefit analysis. Part II considers the problem of ascribing a monetary value to things. The third part covers six separate case studies drawn from real-life examples. The book begins with an extended elementary introduction written by the editors. (shrink)

The issue of assessing priorities is one that has become the subject of much debate in the National Health Service particularly in the wake of various documents on priorities from central Government. It has become even more so with the prospect of real cuts in expenditure. Economists claim that their science, or perhaps more accurately art can assist in determining not only how best to achieve various ends but also whether and to what extent competing objectives should be pursued. Such (...) choices cannot be made in the absence of some ethical considerations and it is important that health service decision makers (and in particular the medical profession) are aware if the relationship between economics (and especially cost-benefit analysis) and medical ethics. (shrink)

For many innovations, oversight fits nicely within existing governance mechanisms; nevertheless, others pose unique public health, environmental, and ethical challenges. Synthetic artemisinin, for example, has many precursors in laboratory‐developed drugs that emulate natural forms of the same drug. The policy challenges posed by synthetic artemisinin do not differ significantly in kind from other laboratory‐formulated drugs. Synthetic biofuels and gene drives, however, fit less clearly into existing governance structures. How many of the new categories of products require new forms of regulatory (...) oversight, or at least extensive forms of testing, remains unclear.Any effort to improve the governance of synthetic biology should start with a rich understanding of the different possible science‐policy interfaces that could help to inform governance. CBA falls into a subset of the overall range of possibilities, and which interface is appropriate may turn out to depend on context, on the demands of the decision at hand. In what follows, we lay out a typology of interfaces. After that, we turn to the question of how to draw upon the range of possible interfaces and effectively address the factual and moral complexities of emerging technologies. We propose a governance model built around structures that we call “governance coordinating committees.” GCCs are intended to be mechanisms for accommodating the complexities of innovations that have far‐ranging societal impacts. The production of biofuels, for example, could contaminate water supplies and have a destructive environmental impact if not managed correctly. The introduction of a gene drive could have economic and environmental impacts that are not restricted to one nation. Forging appropriate means for determining and evaluating those societal impacts, to the best of a corporation's, industry's, or government's ability, is central to responsible research and innovation. Public policy must be shaped in a manner that accommodates as many concerns as possible and minimizes risks. (shrink)

A rule for the acceptance of scientific hypotheses called 'the principle of cost-benefit dominance' is shown to be more effective and efficient than the well-known principle of the maximization of expected utility. Harvey 's defense of his theory of the circulation of blood in animals is examined as a historical paradigm case of a successful defense of a scientific hypothesis and as an implicit application of the cost-benefit dominance rule advocated here. Finally, various concepts of 'dominance' are considered by means (...) of which the effectiveness of our rule may be increased. (shrink)

A rule for the acceptance of scientific hypotheses called ‘the principle of cost-benefit dominance’ is shown to be more effective and efficient than the well-known principle of the maximization of expected (epistemic) utility. Harvey's defense of his theory of the circulation of blood in animals is examined as a historical paradigm case of a successful defense of a scientific hypothesis and as an implicit application of the cost-benefit dominance rule advocated here. Finally, various concepts of ‘dominance’ are considered by means (...) of which the effectiveness of our rule may be increased. (shrink)

In evaluating difficult decisions which have a wide social impact, consequentialist ethics offers the most reliable footing. Consequentialism is necessary, for that matter, in order to make room for scientific input which will in turn endeavour to provide accurate and objective predictions of the effects of the decisions in question. In the final analysis, we are dealing with value-laden choices and consequentialism should not be, and in fact cannot be, reduced to one specific ethical option. For this reason a political (...) process is necessary for negotiating between the diversity of perspectives. Such a process will proceed in a more structured manner if techniques to make our ethical evaluation more explicit are used, and the furthest that can be gone in this regard is to try to reduce the various effects, as far as is possible, to one common denominator.Socio-economic cost-benefit analysis is often presented as an objective instrument for evaluating governmental decisions. As a matter of fact, however, it departs from a quite specific utilitarian option , and one which is not easy to accept. From this perspective, decisions are evaluated exclusively on the basis of the subjective advantage they bring to individuals in society. The idea of evaluating the various effects involvedin monetary terms can, nevertheless, remain of value, even when we are inclined to resist the technocratic illusion fostered by some supporters of SCBA. Monetary evaluation should certainly not be considered the last word in the discussion. On the contrary, it should be seen as a necessary reference point for the structuring of a wider ethical and political debate.In this paper I have focused exclusively on difficult governmental decisions which have significant economic aspects, i.e. where many of the effects involved can easily be evaluated in market terms. Of course, when this is not the case, the practical advantages of monetary evaluation techniques disappear. When decisions take place at a more personal level, even consequentialism will lose much of its ethical appeal. (shrink)

This paper discusses the practice of cost-benefit analyses of transportation infrastructure investment projects from the meta-theoretical perspective of critical realism. Such analyses are based on a number of untenable ontological assumptions about social value, human nature and the natural environment. In addition, main input data are based on transport modelling analyses based on a misleading `local ontology' among the model makers. The ontological misconceptions translate into erroneous epistemological assumptions about the possibility of precise predictions and the validity of willingness-to-pay investigations. (...) Accepting the ontological and epistemological assumptions of cost-benefit analysis involves an implicit acceptance of the ethical and political values favoured by these assumptions. Cost-benefit analyses of transportation investment projects tend to neglect long-term environmental consequences and needs among population groups with a low ability to pay. Instead of cost-benefit analyses, impact analyses evaluating the likely effects of project alternatives against a wide range of societal goals is recommended, with quantification and economic valorisation only for impact categories where this can be done in an ontologically and epistemologically defensible way. (shrink)

Cost–benefit analysis (CBA) is much more philosophically interesting than has in general been recognized. Since it is the only well-developed form of applied consequentialism, it is a testing-ground for consequentialism and for the counterfactual analysis that it requires. Ten classes of philosophical problems that affect the practical performance of cost–benefit analysis are investigated: topic selection, dependence on the decision perspective, dangers of super synopticism and undue centralization, prediction problems, the indeterminateness of our control over future decisions, the need (...) to exclude certain consequences for moral reasons, bias in the delimitation of consequences, incommensurability of consequences, difficulties in defending the essential requirement of transferability across contexts, and the normatively questionable but equally essential assumption of interpersonal compensability. (Published Online July 31 2007). (shrink)

Robert Crandall writes as if the regulatory state is a simple failure. In fact, however, from the economic point of view there have been many successes, in the form of regulations whose benefits exceed their costs. Moreover, economic criteria are inadequate for evaluating regulatory performance, since even well?aggregated private willingness to pay provides a poor basis for assessing government regulation. It is now necessary to move beyond sterile debates about whether regulation is desirable; nonregulation is not an option, since laissez (...) faire is itself a regulatory system. Democratic, economic, and constitutional criteria hold out the promise of much better regulatory tools, in the form of flexible incentives rather than rigid commands. (shrink)

This article proposes a cost-benefit analysis of argumentation, with the aim of highlighting the strategic considerations that govern the agent's decision to argue or not. In spite of its paramount importance, the topic of argumentative decision-making has not received substantial attention in argumentation theories so far. We offer an explanation for this lack of consideration and propose a tripartite taxonomy and detailed description of the strategic reasons considered by arguers in their decision-making: benefits, costs, and dangers. We insist that the (...) implications of acknowledging the strategic dimension of arguing are far-reaching, including promising insights on how to develop better argumentation technologies. (shrink)

Cost-benefit analysis (CBA) evaluates actions in terms of negative consequences (costs) and positive consequences (benefits). Though much has been said on CBA, little attention has been paid to the types of values held by costs and benefits. This paper introduces a simple typology of values in CBA and applies it to three forms of CBA: the common, money-based CBA, CBA based in social welfare, and CBA based in intrinsic value. The latter extends CBA beyond its usual anthropocentric domain. Adequate handling (...) of value typology in CBA avoids analytical mistakes and connects CBA to its consequentialist roots. (shrink)

This research proposes a modified metaheuristic optimization algorithm, named as improved stochastic fractal search, which is formed based on the integration of the quasiopposition-based learning and chaotic local search schemes into the original SFS algorithm for solving the optimal capacitor placement in radial distribution networks. The test problem involves the determination of the optimal number, location, and size of fixed and switched capacitors at different loading conditions so that the network total yearly cost is minimized with simultaneous fulfillment of operating (...) constraints. Also, the hourly on/off scheduling plans of switched shunt capacitors considering a modified cost objective function are obtained. The proposed ISFS algorithm has been tested on two IEEE 69-bus and 119-bus RDNs and a practical 152-bus RDN. For clarifying the effectiveness and validation of the ISFS, the simulated results have been compared with those of other previously utilized solution approaches in the literature as well as the original SFS. From result comparison, the proposed ISFS outperforms other previous approaches regarding solution quality and statistical performance for the compared cases, especially in the complex and large-scale networks. Notably, compared with the original SFS, the proposed ISFS shows a significantly better performance in all the tested cases. (shrink)

Throughout the Fourth Amendment’s history, major doctrinal shifts have been driven by technological change.1 Sometimes the result has been more Fourth Amendment protection,2 sometimes less.3 And in...

The species comprising the fungal endophyte genus “Epichloë ”are symbionts of cool season grasses. About half the species in this genus are strictly vertically transmitted, and evolutionary theory suggests that these species must be mutualists. Nevertheless, Faeth and Sullivan (e.g., 2003) have argued that such vertically transmitted endophytes are ’usually parasitic,’ and Müller and Krauss (2005) have argued that such vertically transmitted endophytes fall along a mutualism-parasitism continuum. These papers (and others) have caused confusion in the field. We used a (...) systematic review to show that close to half of the published papers in this field incorrectly categorize the interaction. Here, we develop the argument that advantages and disadvantages are not the same things as mutualism and parasitism and that experimental evidence must be interpreted in the context of theory. We argue that, “contra ”Faeth and Sullivan, it is highly unlikely that such strictly vertically transmitted endophytes can be parasites, and that, “contra ”Müller and Krauss, it is inappropriate to apply the continuum concept to strictly vertically transmitted endophytes. We develop a mathematical model to support and illustrate our arguments. We use the model to clarify that parasitism “requires ”some degree of horizontal transmission, and that while it is appropriate to use the continuum concept when referring to the genus as a whole, or to species that possess horizontal transmission, we argue that it is inappropriate to use the concept when referring to species that are strictly vertically transmitted. (shrink)

What next? We are forever making decisions. Typically, when unsure, we try to identify, then compare, our options. We weigh pros and cons. Occasionally, we make the weighing explicit, listing pros and cons and assigning numerical weights. What could be wrong with that? In fact, things sometimes go terribly wrong. This paper considers what cost-benefit analysis can do, and also what it cannot.

According to evidentialist views, credence in a proposition p should be proportional to the degree of evidential support that one has in favor of p. However, empirical evidence suggests that our credences are systematically sensitive to practical factors. In this article, I provide a cost–benefit analysis of credences' practical sensitivity. The upshot of this analysis is that credences sensitive to practical factors fare better than practically insensitive ones along several dimensions. All things considered, our credences should be sensitive to (...) practical factors. (shrink)

Cost effectiveness. Economics. This is an introduction, accessible to non-economists as well as to economists, to the practice of cost benifit analysis. It begins from a discussion of financial appraisal. The distinguishing features of cost benifit analysis are then introduced progressively. Practical examples are used whenever possible to aid the exposition. Economic theory is introduced only where it is immediately relevant to practice. Nonetheless the approach is firmly grounded in economic principles and considerable space is devoted to those ideas that (...) are central to practical cost benefit analysis - shadow prices, consumers' surplus, and valuation of unmarked goods. The additional needs of economically trained readers are catered for by a number of appendices which relate the ideas expounded in the book to mainstream economic theory. (shrink)

Cost-benefit analysis (CBA) is inappropriate as an aid to Covid policy-making because the plural, incommensurable values at stake are not all amenable to monetary measurement. CBA for Covid policy is also undermined by pervasive uncertainty and ignorance, and has some troubling distributional implications. However, non-consequentialist alternatives to CBA tend towards implausibly absolutist prohibitions on risk imposition. Arguments for setting aside consequentialism for special circumstances (the precautionary principle, or a medical rule of rescue) are also problematic when applied to Covid policy. (...) A broad consequentialist approach to policy guidance is defended, one which does not demand commensuration on a common monetary scale. Despite the absence of commensuration, policy guidance is still possible. (shrink)

Although the standard theory and actual practice of cost-benefit analysis are seriously defective, the general idea of making social policy in accord with an aggregative, maximizing, consequentialist criterion is a sensible one. Therefore it is argued, against Bantz, that interpersonal utility comparisons can be meaningful, and, against both Bantz and MacLean, that quantitative overall assessments of expected value provide a presumptively rational basis for social choice. However, it does not follow that introducing cost-benefit tests into the political or legal process (...) would always be optimal: recognizing some quite stringent legal rights against involuntary exposure to pollution or risk may actually promote cost-beneficial results more reliably than cost-benefit tests employed in very imperfect circumstances. (shrink)

The approach to controlling greenhouse gas emissions suggested by simple neoclassical economic models has appeared in prominent mainstream journals. This entails weighing up the costs of control compared to the benefits of avoiding damages due to global climate change. This paper presents a critique of extending the microeconomic project based methodology to a complex global problem; raising issues of uncertainty and ignorance. An alternative to simple utilitarianism is seen to be necessary and the potential of a deontological approach is argued (...) to be greater with regard to policy decisions concerning future generations. (shrink)

What is the proper role of cost-benefit analysis in understanding the tort concept of negligence or reasonable care? A straightforward question, you might think. But it is a question that manages to elicit groans of exasperation from those on both sides of the controversy. For most utilitarians and adherents to law and economics, the answer is obvious: to say that people should not be negligent is to say that they should minimize the sum of the costs of accidents and the (...) costs of preventing accidents. Under the economic formulation of the famous Learned Hand test, they should take a precaution if but only if the marginal costs (or burden, B) of that precaution are less than its marginal benefits (in the form of reduced risks of injury, measured by multiplying the probability (P) of the injury times the magnitude (L) of the injury if it occurs). If B>PxL, it would be absurd to require the greater expenditure, B. For many advocates of a fairness, corrective justice, rights-based, or contractualist perspective, the opposite answer is equally obvious. Permitting a person to impose risks of harm on others merely because he would thereby obtain a benefit (or would otherwise incur a burden) greater than the discounted value of the harm he might inflict, amounts to authorizing him to dump the costs of his risky activities on innocent victims. To permit this type of sacrifice of individuals on the altar of aggregate social welfare is morally abhorrent. Both sets of criticism have important elements of truth. Neither an unqualified cost-benefit analysis nor an unqualified rights-based rejection of tradeoffs is defensible - either as a description of tort doctrine and practice or as a normative prescription. However, a qualified (sensitive) consequentialist approach can accommodate legitimate criticisms of cost-benefit analysis: the consequentialist can launder preferences, and can consider the distribution of risk both in the social welfare calculus and in determining whether to compensate. At the same time, a qualified (tough-minded) deontological approach can accommodate the legitimate need to recognize tradeoffs: the deontologist can permit intrapersonal but not interpersonal aggregation of risks and benefits, can apply the concept of threshold deontology to risky activity, and can consider individual rather than population risk. I conclude that the formulation of the Learned Hand test found in the Restatement Third of Torts is broad enough to encompass each of these qualified approaches. (shrink)

By their nature, the most vexing social problems reflect collisions between social and economic interests of parties with highly divergent views and perspectives on the cause and character of what is at issue and the consequences that flow from it. Conflicts around biotechnology applications are good examples of these problems. When considering the potential consequences of proposed biotechnology applications, an enormous range of perspectives arise reflecting the breadth of different and often competing interests with a stake in life's future.This essay (...) starts from an assumption that the traditional tool of cost‐benefit analysis is not adequate for adjudicating competing claims around the introduction of new biotechnology applications. It tends to require implicit simplifying assumptions that reduce or mask true underlying levels of complexity and uncertainty, and the results it produces deliver a definitive and singular answer, as opposed to a multiplicity of outcomes. In this essay, I describe some of the key elements of formal scenario planning to show how CBA could be redeployed as a supporting tool within the broader decision support methodology of formal scenario planning. (shrink)

The FASB in its Conceptual Framework has set high principles in the ethics of standard-setting in accounting. This paper concentrates on what the FASB calls the cost/benefit constraint, i.e., the commitment to setting an accounting standard only when the benefits of the standard exceeds the costs of that standard toall stakeholders. This constraint is supposed to take precedence over other concerns, such as neutrality (freedom from bias) of account information.The major conclusion of this paper is that a conflict exists between (...) the FASB's commitment and its practice. There is no evidence that the FASB has always made a costs and benefits judgement with respect to proposed standards. In the cases when such a judgement is made, the FASB discounts social costs; therefore, it is not considering costs to all stakeholders. At the same time the FASB discounts social costs, it seems to have an undue concern for standards that do not increase the volatility of net income. The Conceptual Framework explicitly defines costs as the costs to society as a whole. (shrink)

President Obamas recent memorandum calling for an overhaul of White House regulatory policies provides an opportunity to revisit our reliance on cost-benefit analysis as a fundamental regulatoryprinciple.

Data on birth order and parent-offspring relations for 1,601 adolescents participating in the National Longitudinal Study of Adolescent Health were used to test hypotheses about the role of adolescent suicidal behavior in parent-offspring conflict. Among adolescents highly dissatisfied with their mothers, the odds that middleborns would make at least one suicide attempt was 23% that of first- and lastborns (p<.001), but their odds of receiving medical treatment for their attempts was 8.5 times greater than the odds for first- and lastborns (...) (p=.032). The results are tentatively interpreted as supporting the hypothesis that adolescents use suicide attempts to leverage investment from their parents. (shrink)

An offshoot of decision analysis, risk-cost-benefit analysis (RCBA) dominates US policymaking regarding science and technology. In this paper a central normative presupposition of RCBA, called "the linearity assumption" is argued against. This is that there is a linear relationship between the actual probability of fatality and the value of avoiding a social risk or the cost of a social risk. The main object of this essay is to show that the presuppositions underlying the linearity assumption are highly questionable. It is (...) maintained that assessors ought to give more consideration to broadening their interpretations of "unit cost" and "societal risk" and to abandoning their claims about linearity. (shrink)