14 Tex. Tech. Admin. L.J. 401 (2012-2013)
Who Regulates the Regulator: Cost-Effectiveness Analysis in Texas State Agency Rulemaking

handle is hein.journals/ttalr14 and id is 423 raw text is: WHO REGULATES THE REGULATOR?: COST-
EFFECTIVENESS ANALYSIS IN TEXAS STATE
AGENCY RULEMAKING
by Kathleen Hartnett White' and Josiah Neeley
I.   INTRODUCTION: REGULATORY IMPACT ANALYSIS.........            ......401
II.  COST-BENEFIT ANALYSIS UNDER CURRENT LAW............................403
III. ADVANTAGES OF COST-BENEFIT ANALYSIS ....................406
IV. SOME PROBLEMS           .................................................407
A. Empirical Problems with Cost-Benefit Analysis......................... 407
1. Cherry Picking         ........................       .......408
2. Linear No-Threshold Hypothesis ..........            ......... 410
3. Co-Benefits        .................................411
B. Normative Problems with Cost-Benefit Analysis........................413
1. Putting a Dollar Value on Human Life ................................ 413
2. Are All Lives Equal?       .....................      ...... 416
V.   SOME OPTIONS           ........................................ .....417
VI. COST-BENEFIT ANALYSIS VS. COST-EFFECTIVENESS ANALYSIS .....419
VII. CONCLUSION          ...................................................420
I. INTRODUCTION: REGULATORY IMPACT ANALYSIS
Regulatory Impact Analysis (RIA) typically uses cost-benefit analysis,
which examines the anticipated effects or outcomes of proposed regulation.
As the name suggests, cost-benefit analysis involves a comparison of the
expected costs of a proposed rule (including the administrative costs,
enforcement costs, compliance costs to the regulatory entities and other
indirect economic costs to the general public, and direct costs to regulated
individuals) with the expected benefits (such as benefits to human health,
the environment, the economy, etc.).' Agencies have long used various
forms of RIA to assess the relative advantages or benefits of proposed
regulation in comparison to the relative burdens and monetary costs of
* Kathleen Hartnett White is the Distinguished Senior Fellow in Residence and Director of the
Armstrong Center for Energy and the Environment at the Texas Public Policy Foundation. Prior to
joining the Foundation, Ms. White was Chairman of the Texas Commission on Environmental Quality
from 2001-2007.
** Josiah Neeley is a Policy Analyst with the Armstrong Center for Energy and the Environment
at the Texas Public Policy Foundation. Mr. Neeley holds a BA from the University of Texas and a JD
from Notre Dame Law School.
1. See discussion infra Part II.

401

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