In recent years there has been substantial interest in benefits
assessment methods, especially as these methods are used to assess
health, safety, and environmental issues. At least part of this interest
can be traced to Executive Order 12291, issued by President Ronald
Reagan in 1981. This Executive Order requires Federal agencies to
perform benefits assessments of pro- posed major regulations and
prohibits them from taking regulatory action unless potential benefits
exceed potential costs to society. Heightened interest in benefits
assessment methods has in tum given rise to greater recognition of the
inherent difficulties in performing such assess- ments. For example,
many benefits that are intuitively felt to be most important are also
among the most difficult to measure. It can be difficult to identify the
full range of both benefits and costs. The choice of an appro- priate
discount rate for comparing benefits and costs over time is proble-
matic. Even when benefits are quantifiable in principle and agreement
can be reached on their valuation, required d, ata may not be available.
Thus considerable uncertainty is built into most benefit estimates, even
when they are based on the best available data. In light of the
complexities and difficulties associated with the perform- ance of a
benefits assessment, this book reviews the current state of theoretical
and methodological knowledge in the field. The review is extensive in
that it covers over fifty years of research, theoretical develop- ment,
and practice.
