Cost/Benefit Analysis

Do people think better in a foreign language? D'une certaine façon, oui. Il existe des preuves considérables à cet effet, du moins dans la mesure où ils sont moins susceptibles de s'appuyer sur des intuitions qui peuvent conduire à de graves erreurs. Questa scoperta sottolinea e rende più plausibile, una richiesta centrale nella politica di regolamentazione, il che significa che il valore delle analisi costi-benefici. In gewissem Sinne ist die Kosten-Nutzen-Analyse eine Fremdsprache und verringert das Risiko, dass Menschen auf Intuitionen zurückgreifen, die schwere Fehler verursachen. [Do people think better in a foreign language? In some ways, yes. There is considerable evidence to this effect, at least to the extent that they are less likely to rely on intuitions that can lead to serious errors. This finding reinforces, and makes more plausible, a central claim in regulatory policy, which involves the value of cost-benefit analysis. In a sense, cost-benefit analysis is a foreign language, and it reduces the risk that people will rely on intuitions that cause serious errors.] I. Populists and Technocrats Begin with a little experiment, conducted in late 2016 with 204 Americans. Using Amazon’s Mechanical Turk, I began by noting that “people debate how the government should go about reducing risks that come from air pollution, unsafe food, and potentially unsafe working conditions.” I then asked respondents to state their agreement or disagreement, on a five-point scale (from “strongly agree” to “strongly disagree”), with the following proposition: The government should assign a dollar value to each human life – perhaps $9 million – and weigh the costs of regulation against the benefits of regulation. As it happens, the U.S. government routinely does exactly that. Within both Republican and Democratic administrations, the proposition is not even controversial (though there are * Robert Walmsley University Professor, Harvard University. I am grateful to Eric Posner for instructive comments and to the Program on Behavioral Economics and Public Policy at Harvard Law School for valuable support.