Behind the Numbers: Polluted Data

Date Published: 
Sat, 11/01/1997

Eban Goodstein and Hart Hodges. The American Prospect. November 1, 1997.

This impressively comprehensive report, "Behind the Numbers: Polluted Data," exposes the over-exaggerated price estimates of academics, business groups, and even regulatory agencies themselves.

The authors note that this is to be expected from business lobbyists, but others do it too: “academic and government economists have routinely overestimated the costs of reducing pollution emissions—by at least 30 percent, and generally by more than 100 percent.” The study shows that both environmental and worker safety regulations are routinely tagged with cost estimates two times larger than their eventual actual costs. People underestimate how quickly market innovation generates new productivity-enhancing technology in response to regulation (not to mention the societal cost benefits of the regulations themselves). The piece also shows that cleaning up after environmental disasters is almost always far more expensive than we estimate, while regulations to prevent such disasters are almost invariably cheaper than estimated.