Abstract
When performing cost-benefit analyses, regulators typically use willingness-to-pay studies to determine how much to spend to avert risks. Because money has a time-value, when a risk is valued is inextricable from how much it is valued. Unfortunately, the studies on which regulators rely are insensitive to this fact: they elicit people's willingness to pay for risk reductions without identifying the time at which the risk reduction will occur. Relying on these time-indeterminate studies has led to a systematic skew in regulatory cost-benefit analysis, toward the undervaluation of risks to human lives. Insofar as cost-benefit analyses inform regulation, this suggests that the current system systematically under regulates against risks to health and safety. Reprinted by permission of the publisher.
Recommended Citation
Arden Rowell,
The Cost of Time: Haphazard Discounting and the Undervaluation of Regulatory Benefits,
85
Notre Dame L. Rev.
1505
(2010).
Available at:
https://scholarship.law.nd.edu/ndlr/vol85/iss4/4