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Saving Lives: Benefit-Cost Analysis and Distribution

Professor Hammitt, in his Response, Saving Lives:  Benefit-Cost Analysis
and Distribution
, focuses on Graham’s support for using BCA as
a “soft” rule, which would allow for considerations of equity along
with the more common utilitarian measurements.  After exploring
the issues of measurement inherent in BCA, Hammitt concludes that BCA
helps ease some tensions in regulatory decision making by “providing
an integrated framework to account for the consequences of regulation
and making estimates of the magnitudes of these consequences explicit
and open to review and challenge.”  And, by incorporating equity
concerns, Hammitt believes that Graham’s test ultimately “should
make BCA even more valuable.”