Benefit-cost analysis should be guided by the best available data and methods. Yet when assessing regulations, US agencies currently value future impacts using outdated methods and data to determine discount rates. A proposal to revise a document known as Circular A-4 would address this deficiency by modernizing discounting guidance, which would substantially improve US regulatory analysis. A corresponding update has also been drafted for Circular A-94, which will improve US federal public investment analysis.
Citation
Peter H. Howard et al., US Benefit-cost Analysis Requires Revision, 380 Science 803 (2023).