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New Foundations of Cost-Benefit Analysis

Wednesday, September 20th, 2006 

Cost-benefit analysis (CBA) has been an important policy tool of government since the 1980s, when the Reagan administration ordered that all major new regulations be subjected to a rigorous test of whether their projected benefits would outweigh their costs. Many claim that CBA neglects important values, especially benefits, that are hard to measure. In their new book, New Foundations of Cost-Benefit Analysis, Matthew Adler and Eric Posner argue that CBA is a useful tool but should focus on overall well-being rather than economic efficiency.  Government agencies should recognize that the link between preferences and well-being is complicated, and that CBAs should take some of those complexities into account.  For example, an individual's preference for a particular outcome may not improve well-being if the individual is poorly informed.  Likewise, a cost or a benefit of a given amount will have different values to rich and poor people.  CBAs that do not take such factors into account will not accurately reflect well-being.  This book not only places cost-benefit analysis on a firmer theoretical foundation, but also has many practical implications for how government agencies should undertake cost-benefit studies.


AGENDA

Wednesday, September 20th, 2006
11:45 a.m. – 2:00 p.m.
Wohlstetter Conference Center, Twelfth Floor, AEI
1150 Seventeenth Street, N.W., Washington, D.C. 20036

11:45 A.M. Registration and Lunch
12:15 P.M. Welcome
ROBERT HAHN, AEI-Brookings Joint Center
12:30 P.M. Presentation:
MATTHEW ADLER, University of Pennsylvania
ERIC POSNER, University of Chicago
Discussants:
CHRISTOPHER DEMUTH, AEI
RICHARD REVESZ, New York University
2:00 P.M. Adjournment

For more information, please contact Molly Wells at 202.862.5903 or
[email protected].




Biographies

Matthew Adler is Leon Meltzer Professor of Law at the University of Pennsylvania Law School.  He is a prolific and respected scholar in the areas of constitutional law, administrative law, regulation, and legal theory.  He is particularly interested in the application of rigorous philosophical techniques to problems of public law. Since his appointment to the Penn faculty in 1995, Adler has published 45 articles or shorter scholarly works, including publications in such prestigious journals as the Harvard, Yale, Duke, Michigan, Minnesota, Northwestern, NYU, Virginia, and University of Pennsylvania Law Reviews, the Supreme Court Review, the Journal of Legal Studies, and Legal Theory.


Christopher DeMuth
has been president of AEI since 1986. He was previously managing director of Lexecon Inc., an economics consulting firm; editor and publisher of Regulation magazine; administrator for regulatory affairs at the Office of Management and Budget and executive director of the Presidential Task Force on Regulatory Relief in the Reagan administration; lecturer and director of regulatory studies at Harvard's Kennedy School of Government; an attorney with the Consolidated Rail Corporation and the law firm of Sidley & Austin; and staff assistant to President Richard Nixon. He is a director of the State Farm Mutual Automobile Insurance Companies and two family companies. Mr. DeMuth's essays have appeared in Harvard Law Review, Yale Journal of Regulation, Commentary, The American Enterprise, and other publications, and are posted at
www.chrisdemuth.com.


Robert Hahn is Co-Founder and Executive Director of the American Enterprise Institute-Brookings Joint Center and a resident scholar at AEI.  Previously, he worked for the Council of Economic Advisers.  He also has served on the faculties of Harvard University and Carnegie Mellon University.  Dr. Hahn frequently contributes to leading scholarly journals and general-interest periodicals, including The American Economic Review, The Yale Law Journal, Science, and The New York Times.  He is the author of Reviving Regulatory Reform: A Global Perspective (AEI-Brookings Joint Center, 2000) and In Defense of the Economic Analysis of Regulation (AEI-Brookings Joint Center, 2005).  In addition, Dr. Hahn is Co-Founder of the Community Preparatory School, an inner-city middle school in Providence, Rhode Island, that provides opportunities for disadvantaged youth to achieve their full potential.


Eric Posner
is Kirkland and Ellis Professor of Law, University of Chicago.  His books include Law and Social Norms (Harvard, 2000); Chicago Lectures in Law and Economics (Foundation, 2000) (editor); Cost-Benefit Analysis: Legal, Economic, and Philosophical Perspectives (University of Chicago, 2001) (editor, with Matthew Adler); The Limits of International Law (Oxford, 2005) (with Jack Goldsmith); New Foundations of Cost-Benefit Analysis (Harvard, forthcoming 2006) (with Matthew Adler); and Terror in the Balance: Security, Liberty, and the Courts (Oxford, forthcoming 2007) (with Adrian Vermeule).  He is also an editor of the Journal of Legal Studies.  He has published articles on bankruptcy law, contract law, international law, cost-benefit analysis, constitutional law, and administrative law, and has taught courses on international law, foreign relations law, contracts, employment law, bankruptcy law, secured transactions, and game theory and the law.  His current research focuses on international law, immigration law, and foreign relations law.  He is a graduate of Yale College and Harvard Law School.


Richard Revesz is Dean and Lawrence King Professor of Law at New York University School of Law.  He graduated summa cum laude in Civil Engineering and Public Affairs from Princeton University, received an M.S. in Civil Engineering from MIT, and was awarded his JD by Yale Law School, where he was the Editor-in-Chief of the Yale Law Journal.  Following judicial clerkships with Chief Judge Wilfred Feinberg of the United States Court of Appeals for the Second Circuit, and Justice Thurgood Marshall of the Supreme Court of the United States, Dean Revesz joined the NYU Law faculty in 1985, received tenure in 1990, and was appointed dean in 2002.  He has published more than 50 articles and books on environmental and administrative law.  His work on issues of federalism and environmental regulation, the valuation of human life and the use of cost-benefit analysis, and the design of liability rules for environmental protection has set the agenda for environmental law scholars for the past decade.