When is a Life Too Costly to Save? The Evidence from U.S. Environmental Regulations
Under certain environmental statutes the EPA is required to balance costs and benefits in setting standards, whereas under others this is prohibited. This paper examines EPA regulatory decisions made under three statues, two of which require balancing and one of which does not. Using discrete choice models, we find that costs and benefits are significant explanatory variables for all three sets of decisions. This suggests that balancing occurred in each case; however, the value (implicit in these decisions) of avoiding a cancer case varies widely. We also find that a 1987 court ruling effectively curtailed whatever balancing occurred under the statute that prohibited it.