WASHINGTON (May 11, 2021) – In two recent publications, TPI Distinguished Senior Fellow Bob Hahn makes the case to add science and evidence to policymaking.In a piece published in Science Magazine, “Equity in cost-benefit analysis,” Hahn notes that the standard cost-benefit analysis is important, but could be improved. In order to increase their effectiveness, analyses should extend to subgroups of people affected by policy. Hahn acknowledges that gathering data and estimating impacts on subgroups can be difficult and time-intensive, but the result can promote greater equity in policy. Read the piece here: https://science.sciencemag.org/content/372/6541/439.full A second publication, in the American Economic Review, provides a case-based analysis of evidence based policy. Hahn teamed up with Robert D. Metcalfe (Boston University Faculty Research Fellow and TPI University Fellow) to analyze energy subsidies for low-income consumers of natural gas and electricity in California. Hahn and Metcalfe find that:
- The subsidy reduced overall welfare. Subsidy recipients increased the amount of energy they used and, therefore, emissions produced, while increasing the cost for non-recipients. The benefit gained from recipients was less than the total costs.
- The economic impact of subsidies depends on whether the subsidies cause the prices people pay to better reflect the true social costs of the energy they consume.
- In order to offset the costs of the program and yield net benefits, customer benefits need to increase by at least 6%.
Read the piece here: https://www.aeaweb.org/articles?id=10.1257/aer.20180441
Contact: Lindsay Poss, [email protected]
The Technology Policy Institute
The Technology Policy Institute is a non-profit research and educational organization that focuses on the economics of innovation, technological change, and related regulation in the United States and around the world. More information is available at http://www.techpolicyinstitute.org/.