Noelle Swan


Cost-benefit analysis brings logic and efficiency to the discussion of funding allocation for risk prevention. Cass R. Sunstein raises many valid points regarding the benefits of weighing costs and benefits in monetary terms in his 2002 book Risk and Reason: Safety, Law and the Environment. When calculating health risks, it can be very helpful to remove the emotional fear of the risk from the equation and solely examine the factual evidence. Cost-benefit analysis is quite effective at removing the emotional element of the risk, moving to a numerical framework for discussion. This shift in terminology to numbers has a psychological effect forcing us to think outside the emotional amygdala. This can prove beneficial as the fight or flight emotions triggered by risk can be counter productive when considering long term planning. There are undeniable merits to understanding the numerical values of probability based on scientific evidence as well as the financial costs.

Breaking down a complex issue into numerical components is not a new idea. Numbers were created to represent abstract thoughts. What we call the Arabic numeral system was created in India in an effort to conceptualize the infiniteness of space discussed in Hinduism. Numbers have been used to decipher components of natural order such as golden ratio responsible for the intricate spiral of a rose. Through numbers, we are able to represent abstract concepts in simplified terms that then can be compared with one another. Assigning a dollar value to costs and benefits and comparing the two is as intuitive as calculating the exchange rate before deciding to purchase an item in another country. The stringent logic of numbers however can be limited.

Sunstein’s case study of Love Canal is one example of the political costs unaccounted for in cost-benefit analysis. This case study was addressed in my Environmental Management course earlier this semester. During Chris Zevitas’s March 7 lecture on hazardous waste, Love Canal was discussed as a catalyst for public support and federal legislation regarding treatment of hazardous waste sites. Zevitas reported that although health authorities could not link alleged miscarriages, birth defects, blood and liver abnormalities and chromosome damage to Love Canal, there was evidence of benzene, dioxin, DCE and chloroform in the soil. Cost-benefit analysis of the relocation of 950 families utilizing the reports of Governor Carey’s panel would clearly indicate that the costs would outweigh the benefits. It was the political cost of inviting public mistrust that tipped the scales in favor of benefits. In the eyes of the mothers of children born with birth defects, the fact that no correlation was found between their babies’ problems and contaminants will never prove that no correlation exists. Indeed, there is always the possibility that such a correlation has simply not yet been found. To mothers and fathers of children all over the nation, this remote possibility was terrifying enough to drown out any numerical logic. To not respond with drastic measures would have been political suicide for the Carter administration.

The notion that science and statistics are ignored for political gain is quite worrisome. Many would argue that the evacuation and subsequent $275 million clean up was a statement that the US government was determined to provide safe living environment for its citizens. However, there are countless documented threats to the health of the US citizens that did not receive funding in order to finance this $275 million statement. Much as we trust a jury to weigh factual evidence without regard to emotional biases, we trust our elected officials to use the same careful analysis when addressing the security of their constituents. This breaks down, however, when we, the public, refuse to hold ourselves to the same standard.

There are many key components to public resistance to decisions made based on the numerical assumptions found in cost-benefit analysis. While the first paragraph discusses the psychological effect of disarming the emotional centers of the brain by assigning numerical values to the costs and benefits, the opposite effect can often occur. Amongst many Americans, there is a certain fear of reliance upon numbers. Upon implementation of social security numbers, many worried of individuals being reduced to digits. There is a legitimate fear surrounding the reduced perception of the individual when we are “replaced” by numbers. Many fear that such implementation dehumanizes the public in the eyes of politicians, rendering us statistical collateral. History has shown us that these concerns are indeed valid. The Nazis utilized serial numbers as a method of dehumanizing the Jews during World War II.

Further mistrust of numbers arises from the vast flexibility of statistics to make a point. It is well know that statistics can be arranged and presented in a variety of ways, each one implying an entirely different perspective. When viewing a graph, for example, the units of measure selected greatly impact the slope of ascent or decline. A difference of ten people would look very different on a graph divided into increments of 1 than it would on a graph divided into increments of 100. While this is commonly understood, few Americans take the time to decipher the data, and simply ignore it as untrustworthy.

While in a capitalist society it is logical to use monetary figures in an effort to equalize all sides of an issue, attaching a dollar sign to a life is particularly disquieting to the average American. We find inequalities in all areas of our lives from the cars that we drive, to the neighborhoods that we live in, to the educations that we receive and everything in between. How are we to know that our lives are being weighed equally? This is a real concern. Considering that many of the figures used in cost-benefit analysis are gleaned from surveys of citizens about how much they would be willing to pay for increased protections. Our answers will be shaped by our frame of reference for money. A rural farmer or inner city waitress thinks in terms of different numbers than a corporate attorney or an executive. How are we as a public to trust that this will be equalized when we see everyday the inequalities in health care, housing and educational opportunities?

These public concerns surrounding cost-benefit analysis are legitimate. That is not to say that there is no place for such analyses. Rather, each analysis should be weighed on its own merits. Depending on the factors considered as well as a variety of confounders, an analysis can be made to say anything. It is the responsibility of the public, government and media to become informed of the specific factors considered and challenge an analysis that has not been thoroughly flushed out. We must question who performed the analysis, where did they derive their figures from and how were confounding factors controlled. It is only through a critical examination of a cost-benefit analysis that we can truly understand the implications of intervention and inaction. The emotional factors cannot be ignored. They must be validated and addressed, but not excessively amplified. All too often, the media latches onto the initial fear of a risk rather than delving into the actual figures of probability. The hype associated with informing the public of danger often earns great ratings for media outlets. The public must respond to this with requests for more concrete information. While many assume that the media is fulfilling its role of keeping the public informed, it is our duty to make sure that this is actually happening. We as the public are the consumers and hold the power to dictate to the providers of our information what we want to hear. This is the information age, and it is up to the public to demand that the hype and rhetoric be tempered with grounding facts and critical analysis.


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