In response to President Biden’s executive order directing modernization in the methods that federal agencies use to promulgate regulations, the Office of Management and Budget (OMB) has drafted new analytical guidance, much of it related to benefit-cost analysis.
Before its release, CREATE External Senior Fellow Scott Farrow was one of nine academics chosen to review and make recommendations about the new guidance. Scott joins colleagues from Harvard, Berkeley, Yale and other institutions to lend their advice for OMB to consider in its final revision.
Among the issues in guidance are recommendations are the use of distributional weights in benefit-cost analysis, appropriate rate at which to discount future impacts that are central to climate change, application of general equilibrium models and a variety of other technical issues that can affect the analysis of potential and prior regulations. General equilibrium models are used extensively in CREATE’s research.
Scott’s work, much of it associated with CREATE in recent years, includes publications advocating a risk based weighting approach to distributional issues and bridging the partial and general equilibrium methodologies (done in an award-winning article with CREATE’s Adam Rose). Scott has been active on numerous benefit-cost projects often applied to Homeland Security issues, the latest valuing the outcomes at the US border such as legal asylees and illegal outcomes. Scott also played a major role in the Landscape series of projects led by CREATE’s Detlof von Winterfeldt, which also expanded the Center’s work on benefit-cost analysis.