ACADEMIC NEWS & REVIEWS | CRITICAL FACULTIES
Mad for risk at Harvard
By Christopher Shea, 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.
This story ran on page C5 of the Boston Globe on
1/4/2004.
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