Foundations of the Regulatory State
Spring 2005, Section 3Comments on memo assignment #3
(Posted 4/13/2005)
For your reference, here is a link to the original assignment.
The class performed noticeably better on this memo than on memo #2, perhaps in part due to greater familiarity with the bullet-point format. Most of you improved your balance between breadth and depth, and your explanations were clearer, although a number of students still expressed their points in too abbreviated a fashion.
In terms of preparing yourself to write effective exam essays, there were three common deficiencies that turned up on the memos:
- Too much time and space spent restating the underlying fact situation. This gets your essay off to a slow start and leaves you less time and space for analysis. Instead, you should integrate your discussion of the facts into your substantive analysis.
- One-sided analysis. Even in an advocacy setting, it is important to discuss both sides of an issue, just as a good litigator will want to give due credit to the opposing position before arguing against it. For example, explain its internal logic, and then identify implicit normative or positive assumptions that, while possibly valid in other cases, do not apply in this situation. In addition, for the practical purposes of evaluating you in comparison with other students , I need you to demonstrate to me that you have mastered the ideas of the course, including those with which you disagree.
- Relatedly, failure to consider complexities in the concept of equality. In the first unit of the course, we discussed and compared many possible conceptions of distributional justice; and it is usually possible to develop some sort of equality argument on both sides of an issue. The VSL/VSLY debate is an especially apt illustration of this fact, and memos that asserted that equality unambiguously pointed toward one criterion or another were considerably less effective than memos that acknowledged and discussed the different senses of equality that underlay the rival concepts.
Hhere for your reference is a sampling of the student essays that I thought were among the most effective we received.
[1]
To: Stephen L. Johnson
Re: Clear Skies policy and cost-benefit analysisBecause the Clear Skies Initiative has failed a crucial vote, it will fall to the EPA to implement the policy.
- This policy is a priority in your 500-Day Plan.
There are two ways to do OMB's required cost-benefit analysis:
I. The value of statistical life (VSL) technique used to analyze Bush's Clear Skies Initiative.
- VSL presents people's willingness to pay for risk reduction in terms of lives saved.
- Two benefit estimates were presented, one which used one VSL figure and one which used a lower VSL for people over 70.
- Not distinguishing between ages is more traditional.
- Pros:
- People are used to this technique and tend to accept it as practically necessary even if they object to monetizing the value of life.
- Cons:
- Life and risk reduction cannot be easily or neutrally monetized.
- Distinguishing between ages was highly controversial.
- Pros:
- Age discounting tends to favor programs that help the young.
- Many agree that if you can save either the life of a 10 year old or of a 70 year old, you should save the younger person.
- In the national context of the Clear Skies initiative, the elderly will not receive less benefit than others; the discount is only an administrative tool to assess the overall value of a program.
- Cons:
- Opposition to age discounting could cause the regulation to be rejected based on the method rather than the policy's actual effects.
- The elderly object because it accords them less value.
- Environmentalists object because it produces lower benefits and could lead to the rejection of more regulation.
II. The value of statistical life-years extended (VSLY) method.
- VSLY presents people's willingness to pay for risk reduction in terms of life-years extended
- Pros:
- It incorporates the idea limited resources should go to save a child rather than an elderly person without explicitly putting different values on their lives.
- Appears more equitable than age discounting because an extension of each person's life is worth the same amount.
- Cost-benefit analysis includes value judgments about the worth of life, but this eliminates a further value judgment about the comparative values of two lives.
- It encompasses the concept that lives cannot be saved but only extended.
- Cons:
- Environmentalists object to monetizing life and the environment.
- VSLY yields lower benefit estimates than VSL which could lead to the adoption of less regulation.
- Elderly may still object because under VSLY, policies that favor youth will be preferred.
Recommendation: to meet OMB requirements, we should use both VSL without age discounting and VSLY to get a range of values for the benefits of regulation. We should invite debate about the differences in the figures to show that the EPA is not strictly focused on numbers but also on environmental problem solving.
[2]
To: Stephen L. Johnson
From: Special Assistant for Policy Analysis
Internal Policy Memo: Age-Adjusted Cost Benefit AnalysisRecent controversy over the EPA's use of age-adjusted cost-benefit analysis stems primarily from competing normative and positive conceptions of environmental policy.
- Proponents and opponents of age-adjusted analysis disagree over the goals and effects of environmental policy. For example:
- Proponents of age-adjusted analysis emphasize the practicality of age-adjusted analyses in the evaluation of policy; opponents argue that emphasis on practicality draws arbitrary lines and ignores the moral importance of all lives.
- Competing normative and positive conceptions of environmental policy caution against adoption of a single methodology, because:
- Many of the disputes are fundamental.
- For example, conducting further studies will not lead opponents to believe that age-adjustment takes account of the moral value of life.
- Therefore, adopting a single primary methodology would simply alienate all who oppose that methodology, causing a major political fallout.
- Even assuming that age-adjustment is appropriate in some contexts, it is not necessarily appropriate in all contexts.
- For example, age-adjustment may be appropriate when making decisions about medical treatment rather than environmental policy.
- Moreover, in the environmental context, age-adjustment may be appropriate when evaluating some policies but not others.
- Rather than urging the adoption of a single methodology, therefore, the government should urge agencies to use those methodologies best suited to the given policy.
- By adopting this more flexible approach, the government can allow agencies to choose the most appropriate methodology, and also to conduct several different types of analysis on a single policy.
- As a result, federal agencies will be better able to avoid controversies like the recent one surrounding the EPA, because:
- Federal agencies will not be pressured by government guidelines to adopt age-adjusted analysis based on willingness-to-pay in cases where the agency Administrator deems this methodology inappropriate.
- However, lest age-adjustment be wrongly abandoned under this more flexible approach, the government should conduct more research on age-adjusted analysis, which has been further called into question by insufficient and contradictory research:
- Age-adjusted analysis has been justified by research demonstrating that older people tend to discount the value of their lives in terms of willingness-to-pay for improvements in health and safety.
- However, other research has indicated that older Americans do not discount the value of their lives in terms of willingness-to-pay.
- Before deciding whether to reject or re-adopt this method, the government should conduct additional research on willingness-to-pay, including:
- Evaluations of the methodologies used to determine willingness-to-pay in the competing studies.
- Further studies on older and younger people's willingness-to-pay.
- Studies comparing willingness-to-pay for improvements in environmental safety as opposed to improvements in other regulatory contexts.
- If such research demonstrates that age-adjusted analysis is appropriate in at least some contexts, the government will be better able to explain and justify its use of this methodology.
Conclusion: in order to abate current controversy and prevent future controversies, the government should (1) adopt a more flexible methodology, and (2) conduct further research on age-adjusted analysis.
[3]
- Overview of the Controversy
- In calculating the costs and benefits of a proposed environmental regulation, the “Clear Skies Initiative” the EPA performed a cost-benefit analysis that employed a number of methodologies
- One approach, the Value of Statistical Life method (“VSL”), placed different values on the lives of individuals according to their age.
- The VSL approach values the lives of individuals over the age of 70 at a lower amount because their lives will theoretically be shorter and they will not receive the same amount of benefits from the regulations.
- The approach turns on the willingness to pay: the amount of life a regulation will add to members of the different groups leads to a different willingness to pay for the regulations.
- Proponents of the methodology maintain it more accurately estimates the costs and benefits a regulation will have on the populace through distinctions in regulations based on their effect on longevity.
- However, opponents assert it improperly discriminates against and lowers the value of life of the elderly and thus underestimates the benefits of a regulation.
- Controversial because it leaves the impression that the lives of the elderly are not worth the same as the rest of society.
- Recommended position : VSL and willingness to pay approach should be abandoned in favor of a uniform valuation of life.
- Willingness to pay analysis may be fundamentally flawed at the baseline.
- Conflicting studies as to whether the elderly will really be less willing to pay (fund regulations) in order to extend their lives (Viscusi v. Krupnick).
- The potential flaws are particularly apparent when analyzing the value of environmental regulations.
- Who do environmental regulations really benefit?
- Clear Skies is not only targeted at improving the overall status of the environment, it is also oriented to increase the breathing quality of elderly individuals with respiratory diseases.
- Thus, the willingness to pay between age groups will likely be similar.
- Immoral, unpopular and improper to value the lives of the elderly less than the other members of society.
- It is unthinkable to value a life differently based on ethnicity or gender, so why is it appropriate to differentiate according to age?
- Counter-argument: Legislation as it stands discriminates against the young. The remaining annual value of their life is far less than that of the elderly.
- Potential for major political fallout if the methodology is reinstalled :
- Possible perception of expressly circumventing congress: Clear Skies legislation that included the calculation methodology didn't pass through Congress, a regulatory rule that includes the same analysis would likely be perceived as illegitimate.
- Counter argument – probable that Clear Skies did not pass for reasons other than the outcome of the cost/benefit calculation.
- I.e. environmental lobbyists and the potential repudiation of the New Source Agreements.
- Second counter-argument: paternalistic view that this is the best approach to value regulation and that the executive agency has the mandate to pursue this type of legislation.
- Public outcry from environmental, retired-persons and religious organizations on the reinstitution of the valuation methodology.
- Many organizations are key supporters of the administration on other issues, and this may affect their support on those issues.
- It is proven that the elderly have high voter turnout; not a voting block the administration wants to alienate.
[4]
To: Stephen Johnson, E.P.A. Administrator
Subject: age-adjusted analysis in willingness-to-pay measures
Date: 4/13/2005
[5]
The Controversy
The controversy concerns whether to adjust for age when doing cost-benefit analysis in environmental policy
- To what extent, if any, it is permissible to assign a dollar figure to human life
- Whether making such an adjustment impermissibly devalues the lives of older citizens by assigning less total value to the remainder of their lives
- Whether failing to make such an adjustment impermissibly devalues the lives of younger citizens by assigning less average value to each of the remaining years of their lives.
Recommended Government Position
The recommended government position is to implicitly adjust for age while counting each discrete life as being of equal value.
- Design policy while taking into account on a per person (adjusted for age) basis:
- projected future productivity (in terms of earnings, etc.)
- projected future drag (government assistance needed, etc.)
- detriment to health per pollution unit
- After making the above analysis, average the numbers out over the entire population
- Make clear than the assignment of dollar figures to lives here is about making smart and effective policy and not about actually valuing lives in terms of dollars and cents
- The downside of this policy is that it will be difficult to adjust for hotspots, areas where the population's average age is disproportionate to the average age of the nation (or of whatever sample upon which the calculation was based)
The Potential Fallout of Adopting Age-Adjusted Analysis
- Putting any sort of dollar figure on human life is politically risky, and putting more value on one than on another is dangerous
- Taking this approach here could engender a larger push toward valuing life adjusted for of risk and productivity not just in terms of averages across a sample but on a person-by-person basis
- Whatever the statistical significance and legitimacy may be, the practice is, or may at least be seen by many as, morally dubious
- The senior lobby is strong, their voice loud, and voter turnout high
- It is unlikely that seniors would be convinced to accept a one-time drop-off adjustment such as the 37% decrease in life-value that hits at age 70
- Seniors would be more likely to accept a gradual adjustment, but even this would likely meet with resistance
Key to symbols used to mark essays:
On some essays we circled particular words or phrases that seemed found questionable or unclear, and attached these symbols to them.
good point or argument ! excellent point or argument ~ fair point, or incompletely or unclearly expressed – weak point … point needs elaboration " point already made, repetitive ? unclear ?? very unclear, confused, mixing together separate points x mistake of law, misstatement of fact, misuse of term x? point appears mistaken # irrelevant or tangential point #? point's relevance unclear #cl
point irrelevant to interests of client or to your assigned role abs overly abstract c-a fails to discuss obvious counterargument conc conclusory; result of argument stated without reasoning contra
contradiction dir? didn't follow directions exag otherwise good point is overstated or exaggerated ff fighting facts: contradicting stated facts or making assumptions inconsistent with them jg
jargon: using technical language as substitute for analysis lec lecturing: abstract discussion unconnected to or unnecessary for the problem at hand ll laundry list: throwing in relevant and irrelevant arguments alike, without distinction mix mixing together issues that should be discussed separately ns non sequitur: conclusion does not follow rew reword phrasing or diction rf repeats facts unnecessarily sa straw argument: weak or caricatured argument set up merely for sake of rebuttal ss
slow start: too much space spent restating the issue or getting to the point tc throat-clearing; same as slow start ua unsupported assertion vb verbose; too much space devoted to the point or points in question vg discussion is overly vague