The propagation of regional recessions

This paper develops a framework for inferring common Markov-switching components in a panel data set with large cross-section and time-series dimensions. We apply the framework to studying similarities and differences across U.S. states in the timing of business cycles. We hypothesize that there exists a small number of cluster designations, with individual states in a given cluster sharing certain business cycle characteristics. We find that although oil-producing and agricultural states can sometimes experience a separate recession from the rest of the United States, for the most part, differences across states appear to be a matter of timing, with some states entering recession or recovering before others.Business cycles ; Recessions

Are Risk Regulators Rational' Evidence from Hazardous Waste Cleanup Decisions

Using original data on the cleanup of 130 hazardous waste sites, W. Kip Viscusi of Harvard Law School and James T. Hamilton of Duke University's Sanford Institute of Public Policy examine the extent that political decisions and quantitative risk assessments influence cleanup and remediation decisions. They conclude that target risk levels chosen by regulators are largely a function of political variables and risk-perception biases. Communities with higher voter turnouts are more likely at times to have lower risks remaining after final site cleanup and to have more spent to avert expected cases of cancer. They find these political influences are most significant for the least cost-effective site cleanups and the lowest site risks. By basing its policies on an individual risk approach that does not reflect the size of the exposed population or whether the population exists at the site, the Environmental Protection Agency often fails to recognize important aspects of the overall beneficial consequences of its efforts. The mean cost per case of cancer averted at the sample of 130 EPA sites is $11.7 billion. The median cost is$418 million. These estimates use EPA conservative risk assumptions and assume no latency period. With such adjustments, the median cost rises to above $1 billion per cancer case. The most effective 5 percent of all cleanup expenditures eliminate over 99 percent of the cancer risk. Put somewhat differently, 95% of the costs are spent to address less than 1 percent of the risks.

Private Interests in “Public Interest” Programming: An Economic Assessment of Broadcaster Incentives

The reversal of the FCC\u27s laissez-faire approach to broadcasters could be caricatured as a resurgence of progressive paternalism, in which government regulators attempt to influence people to watch more programs approved by the FCC. The notion of an active FCC specifying additional limits on programming may also suggest a return to command and control regulation, at a time when Congress is deregulating many other communications channels. This Comment argues, however, that attempts to influence the amount of educational programming for children, public affairs coverage, and indecent or violent programming are all aimed at remedying, rather than creating, market failures

Strategic Regulators and the Choice of Rulemaking Procedures: The Selection of Formal vs. Informal Rules in Regulating Hazardous Waste

The selection of decisionmaking procedures by regulatory agencies is examined, using the EPA and its implementation of the Resource Conservation and Recovery Act as a source of data. The role that congressional selection of agency procedures plays in the efforts of Congress to control agency policy is refined

The Benefits and Costs of Regulatory Reforms for Superfund

The current policy approach used in the Superfund program is a peculiar halfway house. EPA devotes substantial effort to identifying chemicals at a site and ascertaining their potential risks. It also assesses the costs of a range of remedies in considerable detail. However, many key elements are missing in the agency\u27s analyses. There is no explicit consideration of the size of the population at risk. Risks to a single individual have the same weight as risks to a large exposed population. Actual and hypothetical exposures to chemicals receive equal weight so that risks to a person who, in the future, may choose to live near a currently uninhabited Superfund site receive the same weight as risks to large populations that are currently involuntarily exposed.73 EPA also reports the conservative risk assessment value for each site, without focusing its policy attention on the expected risk level or most likely risk scenarios. Finally, explicit tradeoffs that balance benefits and costs do not enter remediation decisions. These problems arise in part because of decision-making constraints in the Superfund legislation and in part because of the manner in which regulators have implemented the program. Our data show that the core economic elements of the proposed regulatory reform bills would dramatically alter EPA\u27s policy choices. Put simply, the reforms would require that agency regulations maximize the net gain to society (benefits less costs) using plausible risk assumptions. Sound risk assessment and benefit-cost analysis would force wiser spending and eliminate many of the problems that decrease the overall performance of those potentially desirable regulatory efforts such as hazardous waste cleanup...Risk reform is inevitably vulnerable to becoming a vehicle for ignoring environmental hazards rather than remediating them more efficiently. As our analysis shows however, there is a wide zone within which risk reforms can improve efficiency without sacrificing human health considerations

Superfund and Real Risks

An analysis of the Superfund program represents the first systematic effort to document the character of the risks addressed by this legislation, which will in turn determine the total cleanup cost and the degree to which Superfund addresses environmental risks. This analysis is examined