Law Commons^™

Ethical Benefit-Cost Analysis, Richard O. Zerbe

Richard O Zerbe Jr.

Recent criticisms of benefit-cost analysis (BCA) by Ackerman and Heinzerling and others have received considerable notoriety. However, their arguments are theoretically and empirically insufficient to assess its usefulness. Their claim that BCA is based on an undesirable ethical foundation echoes many of the long-standing criticisms of BCA that are now arising to somewhat of a crescendo. The ethical criticisms necessarily fail, as they do not reflect a considered understanding of the ethical foundations of BCA and their empirical criticisms fail due to the lack of evidence.

The foundations of BCA are ethical and legal. This understanding provides a fully realized …

The Legal Foundation Of Cost-Benefit Analysis, Richard O. Zerbe

Richard O Zerbe Jr.

The foundations of cost-benefit analysis (CBA) are legal, and this understanding provides a different view of it. This paper proposes to provide a fully realized foundation for CBA. Such a foundation rests on legal rights and also amends the failure of CBA to include moral sentiments, which arose in the attempt to avoid interpersonal comparisons. This amended legal foundation largely vitiates the extreme positions that have come to dominate thinking about CBA. CBA is increasingly questioned in the legal literature, even as it is being promoted by government practice and the economics literature, and the positions that have arisen from …