Turned up to eleven: Fair and Balanced

Thursday, January 31, 2002

Speaking of cost-benefit analysis, Steven Landesburg describes the NPR Car Talk programs response to a CBA done on cell-phone usage while driving, suggesting that Click and Clack should not dismiss a study that shows an economic value to this admittedly dangerous activity. The article, while arguing its case clearly, ignores and points out one of the reasons that economic analysis is often ignored in policy-making (IMHO). An accepted figure, $6.6 million, is used as the economic value of a human life, and when factoring in damage to vehicles, and non-fatal injuries, the economic benefits, in terms of increased productivity and the personal value of the calls made, outweighs these costs. But imagine a policy maker trying to explain to his constituents that it was worth the sacrifice of some teenagers and babies in fatal crashes, because people really like using car phones, and are willing to pay for it!!! This illustrates the gaping disconnect between economic analysis (it's not called the dismal science for nothing!) and real life.