Abstract
In a number of writings, Cass Sunstein has argued that we should use cost-benefit analysis as our primary approach to risk management, because cost-benefit analysis corrects for the cognitive biases that mar our thinking about risk. The paper critically evaluates this ‘cognitive argument for cost-benefit analysis’ and finds it wanting. Once we make distinctions between different cognitive errors and between different aspects of cost-benefit analysis, it becomes apparent that there are really two cognitive arguments, neither of which is successful as arguments for cost-benefit analysis as a whole. One argument shows that the analysis aspect of cost-benefit analysis is warranted because it corrects for false beliefs about the magnitudes of risk and for the neglect of some costs. While this is a sound argument, it does not provide an argument for other aspects of cost-benefit analysis. The second argument purports to show that commensurating and monetizing the values of the effects of regulation is warranted because it corrects for the use of widely diverging values of a statistical life. This argument fails because the use of widely diverging values of a statistical life is not a cognitive error: It is neither precluded by considerations of instrumental rationality, nor by the requirement of treating like cases alike.
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Notes
I thank Sune Holm, members of the University of Copenhagen Analytic Philosophy Colloquium and two anonymous reviewers for helpful and quality-enhancing comments on earlier drafts of this paper.
The study by Tengs and Graham cited by Sunstein does take the marginal cost issue into account by using numbers for the “level of implementation” of various interventions. However, those numbers are estimates by anonymous reviewers, and there is no publically available information about what their basis is (Parker 2003: 1362–1363, 1377–1381).
As Sunstein rightly argues (Sunstein 2002, Ch. 3), voluntariness is not plausibly conceived of as an either/or property, but rather reflect a number of underlying factors that differ in degree.
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Christiansen, A. On the Cognitive Argument for Cost-Benefit Analysis. Ethic Theory Moral Prac 21, 217–230 (2018). https://doi.org/10.1007/s10677-018-9883-9
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DOI: https://doi.org/10.1007/s10677-018-9883-9