23 Apr 2008

Proposed New Fuel Economy Standards:
A test for benefit-cost analysis

by Richard Belzer

in Regulatory Economics, Regulatory Policy

The Department of Transportation's National Highway Traffic Safety Administration proposed on April 22 to significantly increase the fleet average fuel economy standards motor vehicle manufacturers must meet beginning in the 2001 model year. More...

3 Dec 2007

New CAFE Standards:
Will they be cost-effective?

by Richard Belzer

in Legislation, Regulatory Economics, Regulatory Policy

Wall Street Journal reporter Mike Spector writes on the draft agreement within the Congressional leadership on Corporate Average Fuel Economy (CAFE) standards. The text of the bill is not yet available, but Spector's reporting provides useful information. More...

27 Jul 2007

Who Pays the Cost of Regulation?
Insights from corporate income tax incidence

by Richard Belzer

in Regulatory Economics

Regulation is widely understood as a tax on the activity or person being regulated. Where these activities repair genuine market failures, benefits from regulation may result. If there are benefits from, say, automobile safety regulation, one would expect the beneficiaries to be persons who otherwise would have been killed or injured at the pre-regulatory safety level.

But what about the costs of regulation? Who bears them? More...

5 Jul 2007

Getting Better Information About Air Travel Delays:
How benefit-cost analysis and information quality principles can solve the problem

by Richard Belzer

in Information Quality

In the wake of JetBlue's latest problems, air travel in general is getting more attention. Much of this is focused on various proposals for air travel "customers bills of rights."  We've shown that CBORs don't (and possibly can't) address every circumstance of interest. They also have the peculiar effect of taking service quality out of the domain in which airlines can compete. An alternative approach not only allows airlines to compete on service quality, but encourages them to do so.

One requirement for this to work is passengers have to have access to high-quality information that addresses the kind of service quality questions they care about. The Department of Transportation has issued regulations concerning air travel delays. There is mounting evidence that these rules have not yielded the kind of information passengers need.

27 Jun 2007

New Motor Vehicle Fuel Economy Standards, Part 5:
the evolving mission of 'high occupancy vehicle' (HOV) lanes

by Richard Belzer

in Regulatory Policy

The Washington Post recently carried a story on motor vehicle air pollution. Part of the story concerned carpooling, which normally is required for access to "high occupancy vehicle" (HOV) lanes on urban interstate highways. The story shows how the original purpose of HOV lanes -- reducing rush hour traffic congestion -- is evolving into the entirely different purposes of air pollution control and fuel efficiency. This is the predictable result of extending HOV lane privileges to solo drivers of hybrids. More...

16 May 2007

Energy Efficiency Standards for Clothes Washers:
New evidence that prices are higher and performance is lower than government regulators predicted

by Richard Belzer

in Regulatory Economics

Consumer Reports says that new clothes washers do not perform as well as their predecessors. This is not normally observed in markets. Quality improves over time, as manufacturers constantly work to improve their products to satisfy what consumers want.

Why is quality declining? CR says the culprit is federal energy efficiency regulations. Clothes washers that achieve equivalent levels of cleanliness are much more expensive, and according to CR's testing, most machines perform worse than the products they replaced.
More...

9 Mar 2007

The Atlanta Bus Crash
Useful information from a risk analytic perspective

by Richard Belzer

in Information Quality, Regulatory Science

The tragic bus crash outside Atlanta killed five Bluffton University baseball players, the driver, and his wife. News reports indicate that many more remain hospitalized, some in serious or critical condition.

There is a great deal of commentary in the press and in the blogosphere, much of it focused on assigning blame. We are not going to add to that.

We provide links to the most useful information we've found of interest to highway risk analysts, who take seriously their commitment to improve safety but also realize that they cannot prevent all catastrophic bus crashes. More...

22 Feb 2007

JetBlue's "Customer Bill of Rights"
Is this a big deal?

by Richard Belzer

in Legislation, Regulatory Policy

In response to what it it calls its "worst operational week" ever, JetBlue has issued a "customer bill of rights."

• Does it make any sense for a seller in the marketplace to be issuing "bills of rights" to their customers?
• Is this a sufficient market-driven response for JetBlue to repair customer relations?
• Will it deter Congress from passing legislation on the subject?

26 Jan 2007

Information Quality, Peer Review, and Consumer Reports
Misleading child safety seat tests withdrawn

by Richard Belzer

in Information Quality, Peer Review, Regulatory Science

A recent story involving an erroneous test report about child safety seats published by Consumer Reports shows how information quality is not just a concern related to information disseminated by the federal government.

It also illustrates the value of genuinely independent peer review. Consumer Reports is published by Consumers Union, a nonprofit organization that does much more than product testing. It is an activist organization that routinely takes strong positions on a wide range of public policy issues, including child safety seats.

CU's activism creates an inherent conflict of interest with its product testing functions. Credibility as a product safety tester requires, at a minimum, an extraordinarily rigorous program of independent peer review. Currently, CU relies solely on internal peer review.

27 Dec 2006

Cars and Carnage:
A "Woolley" analysis of highway transportation risk

by Richard Belzer

in Regulatory Economics, Regulatory Policy, Regulatory Science

Today's Washington Post has an op-ed by Peter Woolley, a pollster and professor of political science at New Jersey's Fairleigh Dickinson University, Woolley says the number of people who die in motor vehicle crashes is "staggering" but this risk issue is "absent from the agenda of most public officials and largely ignored by the public."

The op-ed includes relatively specific policy recommendations:

Roads need to be made safer, for example, by extending guardrails and medians to every mile of busy highways. Speeding and aggressive driving need to be much more rigorously controlled. Trucks need to be separated from automobiles wherever possible. And cars need to be built slower and stronger.

Woolley implicitly assumes that the benefits of these regulatory actions would exceed their costs -- or alternatively, that it doesn't matter what they cost, or even if they would work. He also recognizes that the public is largely unified in opposition to his proposals. He proposes to solve that problem by "bludgeon[ing] people -- as they need to be -- with statistics," believing that this will persuade them to agree.

20 Nov 2006

Price Gouging Returns:
This time it's airline fares