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Mad for risk at Harvard
By Christopher Shea
Article re-printed from The Boston Globe
1/4/2004
WHAT SCARES YOU more -- flu or mad cows? If we were
being rational about it, we would do some serious
fretting about runny noses but keep munching on that
steak. (Ratio of flu deaths to mad-cow-disease deaths
in the United States last year: 36,000 to 0.) Nuclear
power vs. sunburn? While Chernobyl caused 2,000 cases
of cancer, mostly nonfatal, among Russians, melanoma
kills 7,800 Americans annually.
These are the kinds of arguments brandished by economists
who specialize in risk analysis, a field that's moved
from obscurity to the corridors of power in the last
two decades. The discipline truly arrived in 2001,
when John D. Graham, founder of the Harvard Center
for Risk Analysis, at the Harvard School of Public
Health, moved to Washington to become the nation's
"regulatory czar." From his perch in the
Office of Information and Regulatory Affairs (OIRA)
in the Office of Management and Budget, he now has
the power to veto rules issued by agencies like the
Environmental Protection Agency that he and his staff
deem insufficiently scientific.
Environmentalists dislike Graham because he has long
argued that regulations to, say, eliminate the last
traces of toxin in drinking water often aren't worth
the cost -- as much as billions of dollars per life
saved, according to his calculations. In contrast,
regulations requiring collapsible steering columns
in cars save thousands of people at minimal cost.
Lately, Graham has taken to arguing that it is time
to apply his methods to the endeavors of the Department
of Homeland Security.
But now Tufts economist Frank Ackerman and Georgetown
law professor Lisa Heinzerling have mounted an assault
on risk analysis as currently practiced, placing Graham
and his center squarely in their sights. Their new
book, "Priceless: On Knowing the Price of Everything
and the Value of Nothing" (New Press), is an
unwelcome-to-office present for the new director of
the Harvard center, James K. Hammitt, promoted from
within three weeks ago. (Among other things, Hammitt
is known for his research on air pollution regulation
in Mexico City.)
Cost-benefit analysis begins by examining how much
ordinary people typically pay to avoid risk in their
own lives: A miner takes a $5,000 pay cut to avoid
a dangerous assignment, for example, while a yuppie
skips the Volvo and buys a less safe econobox in order
to save $8,000. Economists extrapolate from these
figures to estimate how much someone would be willing
to pay to reduce, say, a one-in-10,000 chance of dying
from a carcinogen to one-in-a-million. The theory
is that government shouldn't spend millions of dollars
per person to eliminate risks people happily tolerate
daily.
But if a person drives a Honda instead of a Volvo,
critics like Ackerman and Heinzerling ask, does that
really explain whether she will tolerate pollutants
in her water? Whatever economists say, it is not irrational
to feel heightened "dread," the authors
argue, in the face of chemicals and toxins, especially
since the long-term genetic effects are unknown.
And despite economists' claims of greater rigor,
Ackerman says, "you actually lose information"
when putting things like cancer and loss of species
into monetary terms: "You lose clarity about
how many deaths, how many diseases, how much damage
to the ecosystem." Besides, he argues, current
processes are antidemocratic: Rather than having Graham's
office and the EPA bicker over Byzantine economic
models, why not just put the issues to a vote -- and
see what real live people actually think?
Cass R. Sunstein, a law professor at the University
of Chicago whose 2002 book "Risk and Reason"
defends a liberal version of what he calls the "cost-benefit
state," says he thinks the authors score some
points when they criticize the fuzzy numbers in the
field. But to suggest, as they do, that people who
study environmental costs and benefits are mere shills
of industry is "beneath the dignity of the book's
better arguments." Ackerman and Heinzerling also
"don't adequately acknowledge that cost-benefit
analysis has sometimes been a tool for more aggressive
regulation." Under Graham, for example, OIRA
is pushing the Food and Drug Administration to order
labels placed on foods that contain dangerous trans
fatty acids -- a potential boon for public health.
As an alternative to economic models, the authors
hold up the somewhat fuzzy "precautionary principle"
as an ideal. But the executive director of the Harvard
center, George M. Gray, counters that while "the
precautionary principle tells us how we want to behave
-- we want to be careful -- it doesn't tell us what
to do" about mad cow or dirty water. The only
way forward, he says, is to measure the dangers, put
price tags on the different options (ban all beef?
do nothing?) and -- yes -- start crunching the numbers.
Christopher Shea's column appears in Ideas biweekly.
E-mail: critical.faculties@verizon.net.
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