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Cost-benefit Analysis
A Category Archive (52 entries)
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November 4, 2009
Cost-benefit Analysis
David Henderson
One of the conclusions that emerges from "thinking on the margin," one of the Ten Pillars of Economic Wisdom that I teach my students, is that just as you shouldn't underinvest in something, so also you shouldn't overinvest. In fighting... MORE
October 24, 2009
Cost-benefit Analysis
Bryan Caplan
"National defense" is a textbook example of a public good. Unlike Austrians, I have no problem with the concept of public goods. I just deny that national defense is a valid example. In fact, I will be so bold as... MORE
October 21, 2009
Cost-benefit Analysis
Bryan Caplan
Scott Sumner's not officially in the Pigou Club - and for the record I'm officially not in the club. Still, in a just world, Scott's words of wisdom would provoke Pigovians to beg him to become their King:If we set... MORE
September 9, 2009
Cost-benefit Analysis
Bryan Caplan
Economists usually emphasize marginal analysis. Should a firm make one more pound of steel? Should a shopper spend one more minute looking for a lower price? But economics has just as much to say about all-or-nothing decisions. If a firm... MORE
August 28, 2009
Cost-benefit Analysis
Bryan Caplan
In 2005, American kids aged 5-14 had a death rate of 16.3 per 100,000. Here's one way to think about how incredibly low that is:Suppose a kid could keep that childhood mortality rate forever. What would be his expected lifespan? ... MORE
August 26, 2009
Cost-benefit Analysis
David Henderson
On his blog yesterday, Jeffrey Miron does a rough cost-benefit analysis of torture; I basically agree with his quick analysis. He ends as follows: In that case, the cost-benefit evaluation of torture is trivial: it has certain costs, such as... MORE
August 22, 2009
Cost-benefit Analysis
Bryan Caplan
Back in the fifties, kids didn't even have seatbelts. My dad tells me that in 1971 I came home from the hospital the old-fashioned way: In my mother's arms. Nowadays, in contrast, we transport our babies using special infant carriers... MORE
August 20, 2009
Cost-benefit Analysis
David Henderson
Cash for Clunkers Destroys Wealth Under the current so-called "Cash for Clunkers" program, people who have owned a car for at least a year that gets below 18 miles per gallon can turn in the car as trade for a... MORE
June 10, 2009
Cost-benefit Analysis
Bryan Caplan
Sandra Scarr's "Why Child Care Has Little Impact on Children's Development" (Current Directions in Psychological Science, 1997) is an impressive literature survey. Postcard version: Within a broad range of safe environments, quality variations in child care have only small and... MORE
June 9, 2009
Cost-benefit Analysis
David Henderson
In his classic, The Machinery of Freedom (1973, 1989), David D. Friedman formulated Friedman's Law. The law states: It costs any government at least twice as much to do something as it costs anyone else. David Friedman is usually much... MORE
June 8, 2009
Cost-benefit Analysis
Bryan Caplan
In most disciplines, experts oversell their ability to give useful policy advice. In behavioral genetics, however, experts strangely undersell their ability to give useful policy advice. Here's a striking passage from Plomin, DeFries, McClearn, and McGuffin's leading behavioral genetics textbook:The... MORE
May 18, 2009
Cost-benefit Analysis
Bryan Caplan
Robin Hanson surveys the empirical literature on what goods are positional and what goods aren't. Prepare to be edified.... MORE
April 15, 2009
Cost-benefit Analysis
Bryan Caplan
During last night's debate, Robin repeated an argument many economists have made: In the long-run, maximizing efficiency is actually better for everyone. If we consistently adopt any policy with benefits greater than costs, then the times that you win will... MORE
January 21, 2009
Cost-benefit Analysis
Bryan Caplan
In the process of replying to Jeff Hummel in the comments, I came across this useful summary of the death toll of the wars of the 18th century. And there's a lot more where that came from. Read them and... MORE
October 14, 2008
Cost-benefit Analysis
Bryan Caplan
The Davis Question asks: What one thing do you think that countries, companies, or individuals must do to make the world a better place in 2008?Dan Klein vlogs his answer: Deregulate the drug approval process.My answer, of course, would be... MORE
August 2, 2008
Cost-benefit Analysis
Bryan Caplan
I've finished the Bostrom-Cirkovic edited volume on Global Catastrophic Risks. The book is a fun read, but it ultimately failed to scare me - and I'm the author of one of the chapters! Out of a long list of conceivable... MORE
May 27, 2008
Cost-benefit Analysis
Bryan Caplan
I gained five pounds in Europe. And it was optimal. Partly, that's just because the food was both good and different from what I can easily get in Virginia. The fundamental reason I gain weight on vacations, though, is that... MORE
February 19, 2008
Cost-benefit Analysis
Bryan Caplan
HD-DVD is dead; Blu-Ray lives. How long will it take before someone starts arguing that the wrong format won due to path-dependence problems?... MORE
February 12, 2008
Cost-benefit Analysis
Bryan Caplan
Our years overlapped, but when I was an undergrad at Berkeley, I never met Aaron Wildavsky. My loss. Here's a great passage he wrote (along with Adam Wildavsky) for Henderson's encyclopedia:Another questionable assumption is that cancer causation is a linear... MORE
October 23, 2007
Cost-benefit Analysis
Bryan Caplan
Economists are great at "predicting" events after they happen. Unfortunately, the real trick is predicting events before they happen. Friedman thus deserves extra credit for foreseeing stagflation. Donald Wittman deserves extra credit for foreseeing the base closings bill. Now I'd... MORE
October 18, 2007
Cost-benefit Analysis
Bryan Caplan
As an equal-opportunity offender, I'm finding it harder and harder to keep up with the competition. After arguing that we should cut health spending in half, Robin Hanson now adds that we should do the same with defense spending:But the... MORE
October 10, 2007
Cost-benefit Analysis
Bryan Caplan
Ed Glaeser says that having kids has positive externalities:[T]here is another reason to subsidize larger families. When parents decide to have kids, they are creating a massive benefit for their children. As much as parents may love their children, they... MORE
September 13, 2007
Cost-benefit Analysis
Bryan Caplan
Terrorism has been an infinitesimal risk so far, but on September 11, Arnold told us that he's worried nonetheless:I understand that if you look at history, the probability of being killed by a terrorist is low. But if you had... MORE
August 30, 2007
Cost-benefit Analysis
Bryan Caplan
I second Arnold's recommendation of Charles Lambdin's dissection of medical diagonosis. Here is wisdom:Where one sides in the debate is largely determined by what one makes of a single phrase: “Group statistics don’t apply to individuals.” This claim, widely believed,... MORE
August 20, 2007
Cost-benefit Analysis
Bryan Caplan
Perhaps Keynes' best quip: "When the facts change, I change my mind. What do you do, sir?" Fair question. But what do you think about people who change their minds when the facts haven't changed? Wait, don't answer... see this... MORE
Cost-benefit Analysis
Bryan Caplan
Kip Viscusi is probably academia's most famous risk analysis. His decades of research document democracy's pervasive tendency to adopt regulations with absurdly high cost-benefit ratios - to spend billions fighting problems that barely exist. But in a recent interview with... MORE
August 3, 2007
Cost-benefit Analysis
Bryan Caplan
Here's another story about a guy who wisely ignored the bad advice of a wise man: Hugo Lindgren (the guy who wrote Tyler's profile in New York Magazine) told Steve Dubner not to co-author Freakonomics!It should be noted, however, that... MORE
Cost-benefit Analysis
Bryan Caplan
Yesterday I said that Tyler Cowen is "the giver of the best and worst career advice I've ever gotten." In the comments, Jason follows up:Please share the best and worst career tips Tyler offered you.Some of the best advice:If you... MORE
April 18, 2007
Cost-benefit Analysis
Arnold Kling
From my latest essay: If we give more people MRI's, we reduce type I errors but increase type II errors. If we give fewer people MRI's, we reduce type II errors but increase type I errors. The Maggie Mahars of... MORE
April 17, 2007
Cost-benefit Analysis
Bryan Caplan
I just filled out a recommendation form that asked me to rate a student's "humility." Every other attribute I was asked to evaluate - e.g. "Intellectual Ability" and "Integrity" - was positive, so apparently humility is supposed to be positive... MORE
April 13, 2007
Cost-benefit Analysis
Bryan Caplan
Remember my Climate Preference Survey idea? Suppose you surveyed a random sample of Americans with the following question: "Overall, would you rather the climate in the area you live got warmer, got cooler, or stayed the same?"Yesterday, I polled a... MORE
March 9, 2007
Cost-benefit Analysis
Bryan Caplan
Steve Levitt has come out against tenure, and Greg Mankiw is standing up for it on grounds I'd normally accept: [U]niversities may well be better off by paying lower salaries to tenured faculty, despite the adverse incentive effects, than paying... MORE
February 10, 2007
Cost-benefit Analysis
Bryan Caplan
Suppose you surveyed a random sample of Americans with the following question: "Overall, would you rather the climate in the area you live got warmer, got cooler, or stayed the same?" Has such a survey ever been done? My guess... MORE
January 31, 2007
Cost-benefit Analysis
Bryan Caplan
Here are three surprising transportation factoids from Clifford Winston's Government Failure vs. Market Failure. Winston on planes: Airport expenses are covered by passenger facility charges and landing fees, which are set by local airport authorities based on an aircraft's weight...... MORE
December 16, 2006
Cost-benefit Analysis
Bryan Caplan
I'm a member of local Fairfax pool. I don't know exactly how this pool got started, but for about $400/year, my family was able to become a shareholder in this private non-profit. One nice thing about this pool is that... MORE
August 14, 2006
Cost-benefit Analysis
Bryan Caplan
GenCon was fantastic. The highlight: Fab Rojas ran a sublime session of Pandemonium!, the tabloid journalism role-playing game. We laughed so hard we cried, and our characters got the front-page story: "Dave Chapelle Rescued from Time-Travelling Witches." You didn't have... MORE
June 19, 2006
Cost-benefit Analysis
Bryan Caplan
Does cost-benefit analysis always council against extremism? In a reply to Arnold, Mankiw seems to argue that it does: I am not a scientist and am therefore agnostic about a lot of issues surrounding global warming. Suppose I assign a... MORE
March 24, 2006
Cost-benefit Analysis
Bryan Caplan
My boys' latest favorite book is The Tawny, Scrawny Lion. It's not only a great story; it also illustrates the concept of deadweight loss with greater clarity and force than most textbooks: Once there was a tawny, scrawn lion who... MORE
March 20, 2006
Cost-benefit Analysis
Bryan Caplan
Wikipeda recently featured a discussion about whether the article about me should be deleted: Caplan is an associate professor, who wrote a few articles, and has a number of opinions. He certainly isn't notable. It seems to me that the... MORE
December 10, 2005
Microeconomics
Bryan Caplan
Keynes famously wished that economists would one day become as useful as dentists. But every time I go to the dentist, it's clear that knowledge of economics would be useful to to dentists. The whole idea of cost-benefit analysis seems... MORE
November 21, 2005
Cost-benefit Analysis
Bryan Caplan
HBO's new series Rome cost $100 M to make, and its ratings are about one-fourth of The Sopranos'. But it's getting renewed anyway. Bad business? No, it looks like good old-fashioned marginalism and avoidance of the sunk-cost fallacy. According to... MORE
July 29, 2005
Cost-benefit Analysis
Bryan Caplan
When you cite a book, you're expected to list its city of publication. As in: Sheffrin, Steven. (1996). Rational Expectations. Cambridge: Cambridge University Press. Questions: Does anyone care what city a book was published in? Why do you need to... MORE
Cost-benefit Analysis
Arnold Kling
In this essay, I argue that in the wake of the London bombings that screening passengers is still not cost effective. I am pretty sure that any cost-benefit analysis of "equal-opportunity" screening would reach an adverse determination. Crude racial profiling... MORE
July 27, 2005
Cost-benefit Analysis
Bryan Caplan
[Note: This post may be better if you hum as you read.] I am a firm believer in the view that complaining about problems usually makes them worse. I have endured my fair share of bad service in restaurants, but... MORE
November 8, 2004
Cost-benefit Analysis
Arnold Kling
Henry Aaron (the economist, not the former baseball star) writes, The proposed deal imposes huge costs on the District and gives virtually all of the financial gains to the team. The city will bear the burden for years to come,... MORE
October 13, 2004
International Trade
Arnold Kling
Bruce Bartlett surveys recent cost-benefit analysis. In July, economist Martin N. Baily, chairman of the Council of Economic Advisers under President Clinton, looked at who benefits from outsourcing. He found that... on balance, the U.S. economy gains $1.12 to $1.14... MORE
August 9, 2004
Cost-benefit Analysis
Michael Munger
by Michael Munger Guest Blogger An amazing study was released August 2 by the UCal-Berkeley Labor Center. The conclusion? Wal-mart costs California $86 million a year. The nefarious company does this by cruelly (wait for it) employing 44,000 Californians as... MORE
May 21, 2004
Cost-benefit Analysis
Arnold Kling
In my latest essay, I argue that the costs of wiretapping are going up, while the costs of alternative surveillance technologies are going down. With ordinary phone service, wiretapping is nearly impossible to prevent. Regardless of what equipment the phone... MORE
September 2, 2003
Cost-benefit Analysis
Arnold Kling
Does the absence of a bottom line affect government behavior? Consider this story from the Washington Post about the "busy season" for GTSI, a company that sells technology products to government agencies. Fall is coming, and for GTSI that means... MORE
May 21, 2003
Cost-benefit Analysis
Arnold Kling
Ted Balaker links to this analysis by the Office of Management and Budget of the effectiveness of government programs. Demanding that programs prove results in order to earn financial support, however obvious and sensible, marks a dramatic departure from past... MORE
May 6, 2003
Regulation and Subsidies
Arnold Kling
Is Federal funding for research in nanotechnology justified? Declan McCullagh raises some doubts. First, private sources will pay for basic research. It may not be at the level that all researchers would prefer, but if it can lead to applied... MORE
April 10, 2003
Cost-benefit Analysis
Arnold Kling
The Atlantic Monthly points to this survey of the economic impact of pro sports stadiums. The verdict from many economic studies is that the marginal contribution of a sports team to a local economy is small, and perhaps negative. When... MORE
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