Benefit–cost analysis is a protocol for assessing alternative public policies, primarily in terms of efficiency. An important complementary element can be estimating distributional impacts to show net benefits for groups of interest. The fundamental advantage is enabling decision-makers to see and weigh the importance of changes in efficiency and changes in distribution. Rigorous estimates of any distributional effects should incorporate credible baselines, private behavior, and markets. Estimation for groups with limited evidence and data is hard. Primary estimates of net benefits should be based on conventional market values. Any estimates based on distributional weights should be supplementary estimates. Combining them into a single number, risks masking the impacts of efficiency and distribution. The values of regulatory effects to U.S. citizens and residents depend on where the risks of damage take place. Willingness to pay values by U.S. citizens and residents to adopt a global value of benefits to increase the probability of international agreements can be positive but will reflect uncertain negotiation and compliance. The primary analysis should focus on benefits and costs to U.S. citizens and residents within domestic borders. The recommended rate of 1.7% does not reflect the rates relevant for all members of society. Given the emphasis on distribution effects, rates should include those facing rates of 3% or more. Sensitivity analysis should include several rates. The onus should be on making the case for a specific behavioral bias and nudge that will successfully address the perceived problem. Recent meta-analyses of nudge interventions indicate difficulty in implementing effective nudges.

After Circular A-4 “Regulatory Analysis” had served various Presidential administrations for 20 years, in 2023 revisions were proposed and made to update and modernize regulatory guidance. At the behest of the Office of Information and Regulatory Affairs within the Office of Management and Budget, peer reviewers were nominated, and a peer review of proposed revisions was organized. Joseph Aldy, Cary Coglianese, Joseph Cordes, R. Scott Farrow, Kenneth Gillingham, William Pizer, Christina Romer, W. Kip Viscusi, and I were selected. The consequent peer reviews are the focus of this synopsis. After reading the comments from my fellow peer reviewers, I was impressed with the careful, thoughtful advice given. When asking nine peer reviewers with various backgrounds to comment on proposed revisions to guidance on regulation, we might expect to get at least 10 different views. Yet, I sense basic agreement on several key aspects of the topics of the notable proposed updates. The degree of consensus is reassuring. Less reassuring, and counter to the actual revisions adopted, is that the peer reviewers mostly agree that fundamental aspects of the updates on the discount rate, distributional analysis, and scope are ill-advised.

Regulatory impact analyses (RIAs) weigh the benefits of regulations against the burdens they impose and are invaluable tools for informing decision makers. We offer 10 tips for nonspecialist policymakers and interested stakeholders who will be reading RIAs as consumers.

1. 1. Core problem: Determine whether the RIA identifies the core problem (compelling public need) the regulation is intended to address.

2. 2. Alternatives: Look for an objective, policy-neutral evaluation of the relative merits of reasonable alternatives.

3. 3. Baseline: Check whether the RIA presents a reasonable “counterfactual” against which benefits and costs are measured.

4. 4. Increments: Evaluate whether totals and averages obscure relevant distinctions and trade-offs.

5. 5. Uncertainty: Recognize that all estimates involve uncertainty, and ask what effect key assumptions, data, and models have on those estimates.

6. 6. Transparency: Look for transparency and objectivity of analytical inputs.

7. 7. Benefits: Examine how projected benefits relate to stated objectives.

8. 8. Costs: Understand what costs are included.

9. 9. Distribution: Consider how benefits and costs are distributed.

10. 10. Symmetrical treatment: Ensure that benefits and costs are presented symmetrically.

Much is known about private financial returns to education in the form of higher earnings. Less is known about how much social value exceeds this private value. Associations between education and socially-desirable outcomes are strong, but disentangling the effect of education from other causal factors is challenging. The purpose of this paper is to estimate the social value of one form of higher education. We elicit willingness to pay for the Kentucky Community and Technical College System (KCTCS) directly and compare our estimate of total social value to our estimates of private value in the form of increased earnings. Our earnings estimates are based on two distinct data sets, one administrative and one from the U.S. Census. The difference between the total social value and the increase in earnings is our measure of the education externality and the private, non-market value combined. Our work differs from previous research by focusing on education at the community college level and by eliciting values directly through a stated-preferences survey in a way that yields a total value including any external benefits. Our preferred estimates indicate the social value of expanding the system exceeds private financial value by at least 25% with a best point estimate of nearly 90% and exceeds total private value by at least 15% with a best point estimate of nearly 60%.