Healthcare technologies are often appraised under considerable ambiguity over the size of incremental benefits and costs, and thus how decision-makers combine unclear information to make recommendations is of considerable public interest. This paper provides a conceptual foundation for such decision-making under ambiguity, formalizing and differentiating the decision problems of a representative policy-maker reviewing the results from an economic evaluation. A primary result is that presenting information to regulators in an incremental cost-effectiveness ratio or cost-effectiveness analysis (CEA) format instead of a net monetary benefit or cost–benefit analysis (CBA) framework may induce errors in decision-making when there exists ambiguity in incremental benefits and decision-makers use well-known decision rules to combine information. Ambiguity in incremental costs or the value of the cost-effectiveness threshold does not distort decision-making under these rules. In reasonable contexts, I show that the CEA framing may result in the approval of fewer technologies relative to CBA framing. I interpret these results as predictions on how the presentation of information from economic evaluations to regulators may frame and distort recommendations. All the results extend to non-healthcare contexts.

A BioBlitz is a rapid and intensive survey of a specific geographic area that brings together experts and often lay participants to assess biodiversity, typically of macrobiota that are easily observed and identifiable on-site. This concept has become popular across taxonomic fields, attracting interest globally to increase knowledge of local biodiversity. Inspired by the success of the approach, we undertook a ‘ParasiteBlitz’ at an unexplored locality (Stono Preserve, Charleston, South Carolina, USA) to determine its feasibility for parasites, whose assessment of diversity is largely neglected worldwide. We assembled a team of parasitologists with complementary expertise. Over 12 days (3 days in each habitat) in April 2023, we intensively screened fishes and aquatic invertebrates for parasites, and sampled sediment and water for environmental DNA (eDNA) metabarcoding from four aquatic habitats: wetland, freshwater pond, brackish impoundment, and tidal creek. We incorporated assistance from non-parasitologists and students. Details on methodologies and results are provided in individual papers in this Special Collection. Traditional methods revealed the presence of ca. 100 species of seven major metazoan parasite taxa, and the eDNA survey yielded over 1,000 amplicon sequence variants identified as parasites, most with sequences unmatched in GenBank, and resulting in only a few species identified as named species in the one-year post-Blitz timeframe we imposed upon ourselves for identification. Limitations and challenges of the ParasiteBlitz are discussed, and our results support that this approach can be effective for rapid discovery of the dimensions of parasite assemblages in an understudied environment and contribute to parasitology knowledge.

The so-called Flyvbjerg database is the largest source of data on the performance of major investment projects. It has generated influential analyses of the magnitude of and reasons for cost overruns and demand shortfalls in major projects. Those analyses have demonstrated, among other things, the systematic presence of large forecast errors in both construction costs and in user demand in the first year of operation. They have also linked those results to the social welfare consequences of the underlying projects, suggesting that the large and systematic forecast errors are indicative of welfare destruction. Given how influential those analyses have been, this paper examines the link between the database, empirical analyses thereof, and social benefit–cost analysis (BCA). To that end, both the measurement of variables in the database and the estimation of forecast errors are contrasted against BCA. The conditions for the estimated forecast errors to approximate those obtained from a BCA are spelled out, and the scope for drawing welfare conclusions based on those estimates is discussed. Furthermore, numerical simulations are presented to explore whether the estimated forecast errors do indeed imply likely welfare destruction. The simulations suggest that as large as the forecast errors are, welfare destruction is no foregone conclusion.

There is a need to value health technologies in a way that accommodates their broader economic impacts and competing approaches for doing so have emerged. The Pareto principle (PP) requires policymakers to resolve intrapersonal trade-offs by deferring to the preferences of the individuals facing those trade-offs. Many broad value frameworks such as cost-utility analysis and its extensions, health-centric multicriteria decision analysis, and poverty-free life expectancy are not sufficiently deferential to these preferences, violating PP. I propose using the health-augmented lifecycle model (HALM) to value health technologies in a way that flexibly incorporates the interactions among health and economic factors – specifically mortality and morbidity risks, paid and unpaid work, consumption, leisure, and public and private transfer inflows and outflows--over the life course. It relies on individual preferences, satisfying PP. It is compatible with cost-benefit analysis, social welfare functions, and equivalent income approaches. I calibrate the HALM for the US setting and apply it to a pediatric vaccine.

The prospects are considered of deploying batteries and fuel cells in order to reduce the carbon emissions from various modes of transport. It is proposed that the government has not done enough to advance these technologies and that Britain is lagging behind other countries. The adequacy of Britain’s future supplies of energy is called into question.

The social cost of greenhouse gases is important in many regulatory impact analyses. However, calculations of the social cost of greenhouse gases are highly complex and periodically revisited. We offer seven recommendations to improve current estimates. These include recommendations to use both country-level and global measures of the social cost of greenhouse gases, to use country-specific values for monetizing climate damages, to represent uncertainties by reporting distributions instead of using only central values, and to conduct a temporal distributional analysis that shows the magnitudes of climate damages across generations. We also provide recommendations for the discount rates that should be used when estimating the social cost of greenhouse gases, and the appropriate discount rates for regulatory impact analyses that include the social cost of greenhouse gases.

We make four main contributions in this paper related to the theory and practice of benefit–cost analysis (BCA). First, we show that most BCAs of policy interventions do not consider the welfare consequences in secondary markets, where goods or services can be complements or substitutes to those in the directly regulated markets. Second, we provide a general theoretical analysis for examining the sign of welfare effects in secondary markets, showing how the results depend on the welfare measure of interest and on whether the goods are complements or substitutes. We conclude that the welfare effects in secondary markets will typically be negative in cases most relevant for policy analysis. Third, we develop a straightforward tool that BCA analysts can use to evaluate the potential magnitude of secondary-market effects in particular applications. The tool itself highlights how secondary markets are likely to be relatively small in most circumstances. Finally, we illustrate use of the tool in different applications that provide further evidence that secondary-market effects are likely to be small.

Many economic analyses, including those that address the COVID-19 pandemic, focus on the value of averting deaths and do not include the value of averting nonfatal illnesses. Yet, incorporating the value of averting nonfatal cases may change conclusions about the desirability of the policy. While per case values may be small, the number of nonfatal cases is often large, far outstripping the number of fatal cases. The value of averting nonfatal cases is also increasingly important in evaluating COVID-19 policy options as vaccine- and infection-related immunity and treatments reduce the case-fatality rate. Unfortunately, little valuation research is available that explicitly addresses COVID-19 morbidity. We describe and implement an approach for approximating the value of averting nonfatal illnesses or injuries and apply it to COVID-19 in the USA. We estimate gains from averting COVID-19 morbidity of about 0.01 quality-adjusted life year (QALY) per mild case averted, 0.02 QALY per severe case, and 3.15 QALYs per critical case. These gains translate into monetary values of about $5300 per mild case, $11,000 per severe case, and $1.8 million per critical case. While these estimates are imprecise, they suggest the magnitude of the effects.

This article describes the process from first proposals in the early 1990s to project completion many years later for seven large Swedish road and railway projects. The purpose is to find reasons for the massive cost overruns as well as explanations for why projects are brought to completion despite much higher costs than when the decision to build was made. Cost overruns are set in an institutional context to highlight the interplay among national, regional, and local policymakers. National investment programs are seen as promises by other parts of society, irrespective of whether project costs increase during the process toward procurement and implementation. Another aspect is that the infrastructure manager’s administrative framework currently makes it impossible to compare costs in contracts with final cost, meaning that there is no institutionalized learning process in place. Design preparations and the estimation of costs for new projects must therefore be done without an understanding of what has been working well in the implementation of previous projects. While Benefit-Cost Analysis (BCA) played no role in the planning of the seven projects, the article sends a stark warning that early cost estimates provide poor input for assessing project rate of return.

Despite repeated calls for retrospective regulatory review by every President since the 1970s, progress on implementing such reviews has been slow. We argue that part of the explanation for the slow progress to date stems from misalignment between the goals of regulatory review and the institutional framework used for the review. We define three distinct goals of regulatory review – the rule relevance goal, the rule improvement goal, and the regulatory learning goal. We then examine the text of the Presidential Executive Orders and major Congressional legislation addressing retrospective review, and document which goals were targeted and which institutions were used to conduct the reviews. We find that the U.S. federal government has almost always sought review of one rule at a time, conducted by the agency that issued or promulgated the rule and that these reviews tend to focus on rule relevance and costs. This institutional framework for retrospective review – one rule, assessed by the promulgating agency, focused on relevance and cost – is only well-suited to a narrow interpretation of the rule improvement goal. We then review alternative institutional structures that could better meet the rule improvement goal and the broader regulatory learning goal across multiple rules and agencies, and we offer recommendations for developing new guidance and institutions to promote multiagency regulatory learning.

The idea of assessing the costs and benefits of public and private projects is not new to Europe, dating back to studies at the Ecole des Ponts et Chaussees (Paris) in the XIX century. Later on, in the last century, Benefit-Cost Analysis (BCA) in its current form has been more extensively used in the United States than in Europe. In the last two decades, however, there has been a rapid increase in its use in a number of European countries and at the European Union (EU) level. European governments often undertake tasks that would be done by private companies in the United States, such as the provision of transport, energy, water and waste management, health services, etc. In the United States the focus of BCA has often been regulatory impact analysis, rather than public project evaluation. One might, therefore, expect that Europeans might approach some things differently from their American counterparts and that new insights might result from these efforts. The articles in this symposium, taken from the recent European Society for Benefit-Cost Analysis (SBCA) conference in Toulouse, illustrate some of these differences and some converging themes.

Bystander programs contribute to crime prevention by motivating people to intervene in violent situations. Social media allow addressing very specific target groups, and provide valuable information for program evaluation. This paper provides a conceptual framework for conducting benefit–cost analysis of bystander programs and puts a particular focus on the use of social media for program dissemination and data collection. The benefit–cost model treats publicly funded programs as investment projects and calculates the benefit–cost ratio. Program benefit arises from the damages avoided by preventing violent crime. We provide systematic instructions for estimating this benefit. The explained estimation techniques draw on social media data, machine-learning technology, randomized controlled trials and discrete choice experiments. In addition, we introduce a complementary approach with benefits calculated from the public attention generated by the program. To estimate the value of public attention, the approach uses the bid landscaping method, which originates from display advertising. The presented approaches offer the tools to implement a benefit–costs analysis in practice. The growing importance of social media for the dissemination of policy programs requires new evaluation methods. By providing two such methods, this paper contributes to evidence-based decision-making in a growing policy area.

Biodiversity points are a quantitative measure for biodiversity. For over a decade, biodiversity points are being applied in the Netherlands for measuring the impact of roads, enclosure dams, and other water management projects on the non-use value of biodiversity. Biodiversity points are quite similar to the quality-adjusted life years used for cost-effectiveness analysis of healthcare treatments. Biodiversity points can be calculated by multiplying the size of the ecotope (e.g., number of hectare), the ecological quality of the ecotope (0–100 %), and the ecological scarcity of each type of ecotope. For many infrastructure projects, the impact on the non-use value of biodiversity can be a principal purpose or a major co-benefit or trade-off, for example, for a park, a fish sluice, a road, an ecoduct, an enclosure dam, or a marine protected area. Biodiversity points are a simple, transparent, and standardized way to aggregate and quantify the qualitative or ordinal assessments by ecological experts. For measuring the non-use value of biodiversity, they are also more informative than valuation by revealed or stated preferences methods. This paper provides the first overview of the application of this method in the Dutch practice of cost–benefit analysis. It also discusses its merits and limitations. The calculation and use of biodiversity points are illustrated by four case studies.

The value of a statistical life (VSL) establishes the money-risk tradeoff that U.S. government agencies have used for four decades to monetize the mortality reduction benefits of proposed regulations. This article advocates the adoption of the VSL more generally both for policy evaluation purposes and for setting the magnitude of regulatory sanctions involving fatalities. Agencies currently employ the inconsistent practice of using the VSL to set the stringency of regulations, while at the same time, reverting to very low monetary values of sanctions for violations that result in fatalities. Reform of penalty levels to reflect the VSL will require increasing the current statutory limits on regulatory penalties. Revamping the penalty structure also will incentivize private companies to incorporate the VSL in their corporate risk analyses. Government agencies, including those concerned with national defense, similarly could profit from greater expansion of the use of the VSL in policy decisions.

Social discounting conventions vary widely. Some differences reflect institutional constraints, but many reflect differing assumptions about how a social discount rate should be derived and applied. The divide between advocates of social opportunity cost and social time preference (STP) frameworks seems unbridgeable. There is no consensus among STP advocates on whether the social cost of funding $1 of public spending is barely more than $1 of consumption or perhaps more than $2; or on whether the covariance of public service benefits with income merits a discount rate premium that is trivial or a few percentage points. The practicalities of government fund raising are sometimes overlooked. The issues are here reviewed in the light of the literature and of experience with developing and applying social discounting regimes and extended debates within government.

Two cost-benefit analysis methods developed from differing economic situations and analytical objectives in the 1960s and 1970s. The Trade Policy Approach of Ian Little and James Mirrlees analyzed international competitiveness of projects producing private goods and physical infrastructure in markets severely distorted by trade protectionism; it was adopted in 1975 by the World Bank; the multilateral regional development banks followed suit. The Public Finance Approach of Arnold Harberger developed from comparative statics analyses of public projects and policies in the United States and was adopted at the US Agency for International Development and in several Latin American countries. The original Trade Policy Approach included social analysis too tedious for everyday application, leading an efficiency-only version to emerge and be popularized by teaching materials from Price Gittinger and colleagues in the World Bank’s Economic Development Institute. It proved the right method for World Bank use until Washington Consensus reforms, the GATT and WTO reduced price distortions, and slowly restored private international financial flows gave private industry access to international private investment capital. Official Development Assistance (ODA) portfolios responded by refocusing on public goods and market failures, leading to decreased utility of the Trade Policy Approach and decreased use of cost-benefit analysis at the World Bank. A 1990s drive in the World Bank to switch from the Trade Policy Approach to the increasingly relevant Public Finance Approach resulted in an internal manual and operational guidelines, but not a book from a distinguished university press, commonly presumed to signal official Bank policy. It is time for that long-overdue book to be published.

The European Union’s regulation for chemical safety (REACH) addresses the registration, evaluation, assessment, and consequent authorization (or restriction) of chemicals which are potentially harmful for both public health and the environment. The current study aims at ascertaining the costs and benefits of the REACH framework for the Austrian economy under major uncertainties, and draws on a wide range of databases on public and workplace health, chemical accidents in households, and the potential environmental impacts of harmful chemicals.

The uncertainties in the REACH system assessments of the effects of chemicals on health lie not only in the insufficiency of scientific evidence but also in the economic evaluation of effects on health, especially in regard to the value of statistical life (VSL), and the economic value of diseases attributed to chemicals.

This benefit-cost analysis (BCA) of the REACH system in Austria therefore takes into account these manifold uncertainties by designing a conservative baseline scenario and by varying all determinants in comprehensive sensitivity analyses. Projected over a period of about 30 years, this paper provides evidence that the REACH system most probably leads to net benefits for the Austrian economy (benefit-cost ratio of about 10.6) even though many benefits are still highly uncertain or unknown.

This paper investigates the role of cost-benefit analysis (CBA) in the context of the European Union (EU) Cohesion Policy. After presenting the EU policy framework and the CBA guidelines adopted by the European Commission, we perform an empirical analysis drawing from a dataset of around 1000 major project applications, submitted during the period 2007–2013 by 22 European countries, and representing almost €180 billion of investment. A distinctive feature of the current CBA approach adopted by the European Commission is that applications for funding must provide a forecast of both the project’s financial rate of return (FRR) and economic rate of return (ERR). While the former represents the financial profitability of the project from a private investors’ perspective, the latter reveals its socio-economic benefits for the whole society. The difference between ERR and FRR mainly depends on the use of shadow prices, the inclusion of externalities and other nonmarket effects in the estimation of ERR, whilst the FRR is based on market prices. We find that, on average, the FRR is slightly negative ($-2.9$%) and the ERR is positive (16.2%). ERR and FRR are positively correlated on average with differences across sectors. We discuss these findings and suggest further research needs.

In this paper we review the benefit-cost analyses (BCAs) made to support applications for authorisations under the EU’s REACH Regulation on hazardous chemicals. Experiences from over 100 cases suggest that there are a number of informational and methodological challenges to overcome in these BCAs. In particular, we find that many REACH applicants have had problems explaining the societal relevance of the regulatory impacts expected to affect them and other market actors. Adapting the framework for regulatory impact assessment proposed by Dudley et al. [(2017). Consumer’s Guide to Regulatory Impact Analysis: Ten Tips for Being an Informed Policymaker. Journal of Benefit-Cost Analysis, 8, 187–204], we discuss these impacts from a welfare economics perspective and make suggestions on how to improve current practices in BCA applied to chemicals risk management. From this discussion we then distill a number of topics that deserve more attention in applied BCAs under the REACH Regulation.

Beginning as a planning tool within Sweden’s national road administration some 50 years ago, benefit-cost analysis (BCA) has come to be a pillar of the national transport policy because of subsequent strategic choices made by the national parliament. These choices made it necessary to widen the analysis of costs to include also externalities and a foregone conclusion was that efficient investment priorities should be made based on BCA. But no one asked whether the political decision makers or the BCA models were up to that task. This paper reviews the institutional framework and practice of BCA in Sweden for transport infrastructure investment, and considers design issues that have been and still are debated, such as whether the discount rate should include a risk term and how to account for the marginal cost of public funds. A main concern with BCA results is the underestimation of construction costs, making transport sector projects look better than they are. Several ex post analyses have established that a higher NPV ratio increases the probability of being included in the investment program proposal prepared by the agency. The requirement to let projects undergo BCA seems to make planners “trim” project proposals by trying to reduce investment costs without significantly reducing benefits. This relationship is weaker among profitable projects. Moreover, there is no correlation between rate of return and the probability of being included in the final program, which is established on political grounds.