Economic Valuation of Health for Environmental Policy: Comparing Alternative Approaches. Introduction and Overview

Protecting human health is a primary goal of environmental policy and economic evaluation of health can help policy-makers judge the relative worth of alternative actions. Economists use two distinct approaches in normatively evaluating health. Whereas environmental economists use benefit-cost analysis supported by monetary valuation in terms of willingness-to-pay, health economists evaluate interventions based on cost-effectiveness or cost-utility analysis (CEA), using quality-adjusted life-years (QALY) or similar indexes. This paper provides background on the controversy about the relative merits of these approaches and introduces the remaining papers in the special issue. These papers (with one exception) were presented at a conference sponsored by the Department of Economics at the University of Central Florida with support from the US Environmental Protection Agency. Although CEA might not lead to substantially different implications for environmental policy than benefit-cost analysis, and QALY may provide a benefit transfer tool to fill gaps in the morbidity valuation literature, the papers in this issue raise serious concerns about the suitability of QALY-based CEA for environmental regulatory analysis. QALY does not in general appropriately represent individual preferences for health and CEA is neither independent of income distribution nor adequate to assess efficiency.     

How efficient are national environmental standards? A benefit-cost analysis of the United States experience

This paper summarizes the results of the first systematic, geographically-specific efficiency assessment of the U.S. experience with national environmental standards and with alternative approaches to establishing those standards. This ex-post evaluation assessed the net benefits that resulted from EPA's regulation of conventional air and water pollutants from the pulp and paper industry between 1973 and 1984. The paper compares the benefit-cost efficiencies of the three dominant regulatory approaches: technology, ambient, and benefits. Unlike previous studies, which assessed benefits and costs on a national basis, the study estimates both costs and benefits on a facility-by-facility basis. The analysis shows how the efficiency of national environmental regulations can vary dramatically at local levels. The authors conclude that the technology-based standards for water pollution management failed as an efficient environmental strategy. The costs clearly exceeded the benefits in the aggregate, as well as in the specific in most situations. Benefits exceeded costs at only 11 of the 68 mills investigated. The ambient based standards for air pollution management succeeded as an environmental strategy in the aggregate, but succeeded in the specific for only one-third of the mills (22 of 60 mills). The benefits-based standards for air pollution management also succeeded in the aggregate as well as in the specific for about one-half of the mills. Benefits exceeded costs at 29 of the 60 mills investigated. The results of the study point to two major conclusions. First, a regulatory policy that is based on some measure of environmental results, either ambient-based or benefits-based, will be more efficient than a policy that ignores environmental results. Second, truly efficient policies for reducing environmental risks require pollution mitigation decisions that take into account local conditions. These include not only the changes in local ambient conditions, but also the number of people who will benefit from pollution reduction decisions. This latter conclusion suggests that national environmental standards per se may be inefficient.Dr. Luken is currently Senior Environmental Advisor to the United Nations Industrial Development Organization (UNIDO) in Vienna, Austria. He is on leave from the U.S. EPA where he was Chief of the Economic Analysis and Research Branch of the Office of Policy, Planning and Evaluation (OPPE). Mr. Clark is President of Environmental Economics Associates of Traverse City, Michigan. He was formerly Chief of EPA's Cost and Economic Impact Analysis Branch in OPPE. The views expressed are those of the authors and do not represent the views of the U.S. Environmental Protection Agency.     

Good practices on cost – effective road infrastructure safety investments

The paper presents the findings of a research project aiming to quantify and subsequently classify several infrastructure-related road safety measures, based on the international experience attained through extensive and selected literature review and additionally on a full consultation process including questionnaire surveys addressed to experts and relevant workshops. Initially, a review of selected research reports was carried out and an exhaustive list of road safety infrastructure investments covering all types of infrastructure was compiled. Individual investments were classified according to the infrastructure investment area and the type of investment and were thereafter analysed on the basis of key safety components. These investments were subsequently ranked in relation to their safety effects and implementation costs and on the basis of this ranking, a set of five most promising investments was selected for an in-depth analysis. The results suggest that the overall cost effectiveness of a road safety infrastructure investment is not always in direct correlation with the safety effect and is recommended that cost–benefit ratios and safety effects are always examined in conjunction with each other in order to identify the optimum solution for a specific road safety problem in specific conditions and with specific objectives.     

农村剩余劳动力迁移的充要条件分析——基于预期收入成本理论

笔者结合收益成本理论及托达罗模型,在对农民预期迁移收益和成本分析的基础上,通过调研数据,分别对就地和异地两种迁移方式以及迁移前后的收益进行对比分析。结论显示:第一,农村剩余劳动力就地迁移和异地迁移的最低期望月薪差值远远大于异地迁移成本;第二,农民对就地迁移和异地迁移的最低期望月收入分别是农民在农村剔除务工收入后人均月收入的3.42倍和4.80倍,这两个比例数值即是本文寻求的焦点——农村剩余劳动力迁移的充要条件,并且该比例数值可能会随着不同地区农村经济水平的提高而减小。     

征地制度改革动态博弈分析

研究目的:剖析征地制度改革研究静态分析的缺陷,厘清征地制度主体之间的互动关系,理解和把握征地制度改革的动力和演绎路径。研究方法:文献资料法,收益—成本法,关系演绎图解法。研究结果:征地制度改革要得以推进,改革所产生的收益—成本要具体化为参与方利益集团的收益与成本之比较。研究结论:中央政府、地方政府和被征地农民三方各自追求效用收益极大、成本极小的互为因果的博弈行动驱动着征地制度改革的演进,演进方向应是创建Pareto改进的非零和博弈的规则。而参与改革三方的多阶段重复博弈决定了征地制度改革是一个渐进的动态发现过程。     

Are The Costs of Proposed Environmental Regulations Overestimated? Evidence from the CFC Phaseout

Benefit-cost and cost-effectiveness analysis are often advocated fordecision making about environmental, health, and safety regulations, butthere has been little research evaluating the accuracy of prospectiveestimates of regulatory costs and benefits. Prospective estimates of themarginal cost of limiting chlorofluorocarbon (CFC) consumption in theUnited States, published shortly before and after the September 1987adoption of the Montreal Protocol, are compared with retrospectiveestimates based on realized market prices. Estimates published beforeinternational regulations were adopted (in May 1986) substantiallyoverestimate the marginal costs of limiting CFC-11 and CFC-12consumption but modestly underestimate the costs of limiting CFC-113consumption. In contrast, estimates published shortly after adoption of theProtocol (in August 1988) appear to underestimate the marginal cost oflimiting CFC consumption.     

Generic Promotion of Sorghum for Food and Industrial Uses

Abstract

Globally, over half of all sorghum is used for human consumption. Yet sorghum is largely unknown as a food in the United States and other developed countries. Recently, the U.S. demand for sorghum as a gluten-free, non-GMO input to food products has been growing. At the same time, the use of sorghum for food and industrial uses is being promoted by the producer-financed United Sorghum Checkoff Program (USCP). How much of that growth can be attributed to the USCP promotion? Has the investment been profitable for sorghum producers? This study finds that USCP promotion programs have resulted in a 4% increase in the sales value of sorghum for that purpose and a 1% increase in total sorghum farm revenue. The farm level benefit-cost ratio is estimated at between 5.8 and 7.1 in terms of producer profit per dollar spent on promotion.     

Valuing Environmental Health Effects – An Economic Perspective

This paper provides an overview of some of the issues involved in comparing benefit-cost analysis and cost-effectiveness analysis based on quality-adjusted life-years as alternative approaches to assessing environmental policies that affect human health. It concludes that: (i) although QALYs have the advantage of reflecting policy impacts on both health status and longevity in a single scalar measure, they are not consistent with utility theory unless individuals’ preferences satisfy some restrictive conditions; (ii) they do not capture other important aspects of the valuation of changes in mortality and morbidity; (iii) cost-effectiveness analysis based on QALYs as a measure of effectiveness omits non-health related effects of environmental policy; and (iv) it leaves unanswered the important question of what level of environmental regulation is appropriate.     

我国发展对外直接投资的税收政策

对外直接投资和引进外资是一国参与国际分工、利用国际资源、享受经济全球化利益的重要手段。两者应同步发展相互促进。而我国目前对外直接投资发展滞后,政府激励政策缺位是主要原因。通过分析税收激励政策的特点与效应,以及政策执行的成本收益,为如何制定税收政策以促进对外直接投资提出了相关政策建议。     

Generic Advertising of U.S. Lamb

ABSTRACT

Generic advertising of U.S. lamb by the U.S. sheep and lamb industry is an effort to reverse an almost continual decline in the industry since World War II. This analysis explores the answers to three related questions: (1) What have been the effects of the generic lamb advertising on U.S. and foreign sheep, lamb, and wool markets? (2) Has the generic lamb advertising program effectively increased the consumption of domestically produced lamb as intended rather than imported lamb? (3) What have been the returns to U.S. sheep producers, feeders, and packers who pay for the advertising? Using a 70-equation, non-spatial, price equilibrium, simultaneous econometric simulation model of the world sheep, lamb, and wool markets, the analysis concludes that the U.S. lamb industry’s generic lamb advertising program has positively impacted their markets, enhanced profitability of the industry, and increased the industry’s share of domestic lamb consumption.