21 Feb 2008
How Not to Estimate Benefits:
The case of Avastin
by Richard Belzer
in Regulatory Economics, Regulatory Policy
The Wall Street Journal editorializes today against a longstanding Food and Drug Administration policy that values the benefits of drugs for terminal cancer patients solely in terms of life extension. Some visual aids may help make the issues easier to understand. More...
18 Feb 2008
Taxing Illegal Markets to Raise Revenue:
To plug a budget deficit, NYS Governor Spitzer proposes to tax illegal drugs
by Richard Belzer
in Regulatory Economics
New York State Governor Eliot Spitzer has proposed to plug part of an expected $4.4 billion budget deficit by enacting a tax on illegal drugs. Similar laws have been enacted elsewhere to enable law enforcement to charge drugs distributors and dealers with another form of tax evasion. (Chances are they already evade federal and state income taxes.)
Are there any conditions in which this proposal could raise significant revenue? More...
2 Jan 2008
What Are Judges Worth? Part 2008
Chief Justice Roberts still fails economics but may yet win his case
by Richard Belzer
in Regulatory Economics
A
year ago we posted notes here
and here
on Chief Justice John Roberts' state of the judiciary report for 2007,
in which he bemoaned federal judges' low salaries and warned of a
"constitutional crisis" if salaries were not increased. We were not
competent to offer informed insight on CJ Roberts' legal claim, but we
were able to quickly dispense with his economic arguments. Taking his
own data at face value, we were able to show that his argument lacked
any merit.
The Chief Justice is back with his report
for 2008, and he recycles the same complaints about low judicial
salaries. What's different this year is that the Congressional
Research Service has analyzed the data more carefully than CJ Roberts
did, and found that Roberts' conclusions were not empirically
supported. In this year's report, Roberts' ignores the CRS study,
dropped the economic privation argument he made last year, and adopted
the all-purpose defense used by weak claimants: he divided the cost of
his proposal by the largest imaginable denominator. More...
6 Nov 2007
The Economics of Cell-Phone Jammers:
A case study in government misallocation of property rights
by Richard Belzer
in Regulatory Economics, Regulatory Policy
New York Times reporter Matt Richtel seems to have set off a pandemic news stories and commentaries with his profile of "otherwise respectable people" who use jamming devices to illegally obstruct the cell phone conversations of people nearby. Based on groundswell of support that appears to have formed for jammers, this looks like a problem worthy of a small amount of economic analysis
As it happens, there are simple market-based solutions. The real problem is that the federal government has preempted them by disallowing market forces to work. One thing should be clear: jammers have appeared on the market because there is considerable consumer demand for them. That means there used to be a "market failure," and this market failure will persists as long the federal government insists on sustaining it. More...
19 Sep 2007
OMB's Principles for Risk Analysis:
OMB's initial response to the National Academy of Sciences
by Richard Belzer
in Regulatory Policy, Regulatory Science
Today the Office of Management and Budget issued a memorandum to agency heads directing them to adhere to certain principles of risk analysis. The memorandum is OMB's initial response to the report of a National Research Council panel that OMB asked to review a 2006 proposed bulletin on risk assessment. That report called the proposed text "fundamentally flawed" and gave seven recommendations, one of which was that it be withdrawn.
A fair reading of the new memorandum is that OMB followed this specific recommendation. 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...
4 Jul 2007
The Importance of Caring:
Will hybrids still sell after they become mainstream?
by Richard Belzer
in Regulatory Policy
Previously we've posted on automotive fuel efficiency, pointing out that other cars besides hybrids get the highest gas mileage. But hybrids have other advantages not available to conventional fuel-efficient vehicles, including access to high occupancy vehicle (HOV) carpool lanes,
Today's New York Times tells us that driving a hybrid shows you care about the environment, and showing you care may be more important than what you achieve. But this raises an intriguing question: One hybrids become mainstream, they won't be different. How will people be able to show they care? More...
27 Jun 2007
Virginia's New "Voluntary Tax" on Its "Bad" Drivers, Part 2:
Backlash
by Richard Belzer
in Regulatory Policy
We had barely finished our post on Virginia's new "civil remedial fee" on state-registered drivers who commit certain enumerated traffic violations, and tucked it away for automatic posting on Thursday thinking that this was not going to be a big issue. Then we opened the Washington Post and discovered that a backlash is well under way.
In our post we noted that Delegate David B. Albo, the sponsor of the law, had made fundamentally inconsistent claims about the law's purpose and effects. We showed that it could either generate revenue ostensibly to fund transportation projects or it could change driver behavior, but not both. We have now added this series to our Ethics and Values tab because it appears that this was not an error of economic reasoning but a knowing attempt to mislead. More...
Virginia's New "Voluntary Tax" on Its "Bad" Drivers:
Taxing traffic and criminal violations in the search for money to fund transportation projects
by Richard Belzer
in Regulatory Policy
Public finance is full of examples where (usually) state and local governments come up with voluntary taxes, by which we mean that if you don't volunteer you don't pay. The classic example is state lotteries. While it's true that "if you don't play you can't win," as Powerball says, if you don't play you also can't lose. Virtually everyone who plays the lottery loses, and state governments collect the profits. That makes them voluntary taxes.
On July 1, a new law will come into force in Virginia establishing a voluntary tax styled as a "civil remedial fee." This one will be used (at least nominally) to fund transportation projects. (We say "nominally" because money is fungible. There is nothing to stop the Virginia legislature from reducing general fund appropriations dollar for dollar with the proceeds collected by this new tax.) More...
16 May 2007
Journal Peer Review and Objectivity:
Corroboration of the problem from scientists themselves
by Richard Belzer
in Peer Review
We've posted on the "rebuttable presumption" of objectivity that the Office of Management and Budget wrote into its government-wide guidelines for information quality and peer review. The core of the problem is that scholarly journals do not use objectivity (as OMB has defined it) as a criterion for acceptance, or as a performance standard for peer reviewers. That means peer review is a poorly targeted (and perhaps completely unguided) way to ensure that federal agencies disseminate information that satisfies the objectivity criterion.
Other scientists are chiming in, with interesting perspectives on various underlying problems in journal peer review. A number of reforms have been suggested and are worth examining. Note that the list of identified problems does not include objectivity as OMB defined the term. Last year we noted that Nature is trying an "open peer review" model, one that uses blogging technology. We have not yet found an analysis of how it has performed.
More...
15 May 2007
Economic Populism:
The seasonal increase in gasoline prices
by Richard Belzer
in Regulatory Economics, Regulatory Policy
We've all noticed that gasoline prices are rising. What's going on ?
More...
11 May 2007
Government-wide Information Quality Guidelines:
Does journal peer review achieve "adequate" objectivity?
by Richard Belzer
in Glossary, Information Quality, Peer Review
Federal guidelines require information disseminated by federal agencies to satisfy a few broad criteria, one of which is objectivity. These guidelines give a "rebuttable presumption" to scientific information published in scholarly journals.
- Do all scholarly journals transmit this rebuttable presumption of objectivity? What about scholarly journals that also have an advocacy mission?
- What is the burden of proof for mounting a successful rebuttal?
More...
9 May 2007
Federal Agency Guidance Documents:
What's "significant"?
by Richard Belzer
in Regulatory Policy
OMB has new procedures for agencies to follow in making significant guidance documents transparent.
We posted an extensive discussion on OMB's Bulletin on Good Guidance Practices, and recently OMB issued an implementation memorandum. Yesterday we commented on the first task facing federal regulatory agencies: assembling and publishing online lists of guidance documents.
Today we address another fundamental question: What constitutes a "significant" guidance document, an d how is this determination made? More...
8 May 2007
Federal Agency Guidance Documents:
Building the inventory
by Richard Belzer
in Regulatory Policy
Executive Order 13422 and OMB's Bulletin on Good Guidance Practices will lead to major changes in the way federal agencies issue guidance.
The first step for each agency is to develop and publish inventories of their significant guidance documents. The deadlines for agency compliance are July 24, 2007 (for significant guidance documents issued on or after January 25, 2007) and August 23, 2007 (for all significant guidance documents). More...
7 May 2007
The New OMB Regulatory Review Procedures:
A primer on implementation
by Richard Belzer
in Regulatory Policy
On April 25 OMB issued guidance to agencies concerning the implementation of Executive Order 13422. More...
