Proposed Regulatory Rules Overlook Preferences Of Elderly And Ill; Environmental Scholar Says OIRA Chief Should Reconsider His Plans

3/20/2002

From: Melinda Wittstock of Resources for the Future, 202-328-5019

WASHINGTON, March 20 -- The Bush administration's proposed overhaul of the criteria used to evaluate the costs and benefits of environmental and other federal regulations is not supported by research from the independent think tank Resources for the Future (RFF), showing that the elderly and the ill value improved life expectancy no less than younger adults (40-65) and the healthy.

John Graham, head of the Office of Information and Regulatory Affairs (OIRA), wants to consider analyzing the benefits of environmental, safety, and other types of regulations on the basis of "life years" instead of "lives saved." He also advocates adjusting these "life years" for the quality of the lives saved, relying on a technique often used to rate different clinical interventions, known as the "quality-adjusted life year" (QALY).

"This form of measurement would overlook how the healthy and the ill, how the young and the old, actually feel about improving their life expectancy," says Krupnick, an RFF senior fellow and an expert on cost-benefit analysis of air pollution policies. "Our research shows that ill people do not place a lower value on life expectancy improvements than healthy people, and older adults do not value an increase in life expectancy any less than younger ones.

"These new rules, if adopted, will value less the lives saved among the chronically ill or the elderly," says Krupnick, who served as a senior economist on President Clinton's Council of Economic Advisors and as a consultant to the World Bank, as well as federal agencies, state governments, and private corporations.

"OMB's desire to put cost-benefit analysis on a more firm footing within the federal government and to introduce techniques to make comparisons of effectiveness easier across any different agencies is to be lauded," Krupnick says. "But to use quality-adjusted life years saved as a measure of regulatory benefits doesn't jibe with how people themselves view the increases in life expectancy from regulation."

Krupnick says it remains unclear just how far OMB is going to go down this route" "But reading between the lines, it looks like a bad idea."

For more information: http://www.rff.org/disc_papers/pdf_files/0037.pdf