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When Benefit-Cost Analysis Becomes Optional: Regulatory Analysis at the Consumer Product Safety Commission in the CPSIA Era

  • Deborah V. Aiken (a1)

Abstract

In this study, I examine how the regulatory analysis practices of the Consumer Product Safety Commission (CPSC), an independent regulatory agency, changed when the Consumer Product Safety Improvement Act (CPSIA) of 2008 relaxed its statutory obligations to conduct benefit-cost analysis (BCA). When given discretion, the agency dropped the practice despite significant institutional experience in conducting regulatory BCA and a history of using BCA as a key input to regulatory decisions. While the decision reflects an agency belief that omitting BCA would speed rulemaking under the CPSIA, the results have been mixed. Moreover, choosing to forego BCA-based decision-making fundamentally changed the agency’s regulatory portfolio. In contrast to the typical rule CPSC historically supported with BCA findings, many of the CPSIA rules impose significant economic burdens yet appear to yield negligible benefits. The CPSC would have been unlikely to have pursued the CPSIA rulemakings on its own because it could not have made the necessary BCA findings.

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The author is the Director of Regulatory Analysis at the U.S. Department of Transportation and the former supervisor of the Economics Directorate at the U.S. Consumer Product Safety Commission. All opinions are the author’s and do not necessarily reflect the official position of the U.S. Department of Transportation or the U.S. Consumer Product Safety Commission.

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References

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When Benefit-Cost Analysis Becomes Optional: Regulatory Analysis at the Consumer Product Safety Commission in the CPSIA Era

  • Deborah V. Aiken (a1)

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