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Incorporating Equity Concerns in Regulation

Incorporating Equity Concerns in Regulation

U.S. regulatory agencies have been required to consider the equity and distributional impacts of regulations for decades. This paper examines the extent to which such analysis is done and provides recommendations for improving it. We analyze 187 cost-benefit analyses (CBAs) prepared by agencies from October 2003 to January 2021. We find that only two CBAs provided net benefits of a policy for a specific demographic group. Furthermore, only 20 percent of CBAs calculate some benefits by group (typically for demographic groups) and only 19 percent calculate some costs by group (typically for industry groups such as small entities). Overall, the differences between presidential administrations are relatively small compared to the differences between agencies in their performance using our measures of distributional analysis. And virtually no CBAs provide a distributional analysis that could help regulators evaluate whether the regulation, on net, advantages or disadvantages a particular group.

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