November 9, 2011

Benefits, Costs, and Other Important Stuff - Demystifying Regulatory Analysis

Jerry Ellig

Former Senior Research Fellow

Regulation is a high priority in Congress as committees conduct regulatory oversight hearings and members introduce legislation focused on regulatory reform. Assessing the pros and cons of any regulation or regulatory-reform proposal requires some basic familiarity with the terms and techniques of regulatory analysis.

In this video, Jerry Ellig explains the economic concepts behind the basic buzzwords of regulatory analysis—such as “benefits,” “costs,” “market failure,” and “cost-effectiveness”—and why they matter. Concepts are illustrated through examples from actual regulatory analyses conducted by federal agencies and university scholars.

The course answers key questions such as:

  • Why should regulatory agencies define the problem they’re trying to solve?
  • Why is regulatory analysis more than an exercise in math?
  • Are jobs a benefit of regulation, a cost of regulation, or something else?
  • What the heck are “transfers?” And how are they different from costs or benefits?
  • Does regulatory analysis tell us what the “right” decision is?