M-RCBG Faculty Working Paper No. 2014-02
The Role of Distribution in Regulatory Analysis and Decision Making
Lisa Robinson, James Hammitt and Richard Zeckhauser
Before promulgating major environmental, health, or safety regulations, U.S. government agencies are expected to assess each regulation’s costs and benefits, as well as its distributional impacts. We systematically review a dozen major regulations issued between 2009 and 2011, with a predominant focus on environmental regulations, to see whether this expectation is met. We find that agencies provide little information on distribution, often simply noting that the regulation will not adversely affect the health of children, minorities, and low-income groups. The reason for this inattention may be philosophic. Regulators may believe they should choose the option that maximizes net benefits as long as the health of these particular groups is not harmed. Other reasons may be more pragmatic. Regulators may worry that reporting the distribution of the impacts will raise issues they lack the legal authority to address; they may believe that distributional impacts are too small to warrant attention; or they may lack needed data, technical guidance, time, or resources. The current approach seems problematic because it focuses on avoiding health-related losses without considering the distribution of benefits or monetary costs. However, it is unclear whether more complete and routine analysis is desirable. Additional work is needed to determine whether the value of such information outweighs the costs of developing it.