Monday, August 11, 2014

Happiness, Cost-Benefit Analysis, and Smoking

Starting back to the 1990s with the "reinventing government" initiative, the political part of the government has put the bureaucratic part under a lot of pressure to justify all new regulations with detailed cost-benefit analysis. But what is a cost, and what is a benefit? There are econometric tools for analyzing how many jobs will be gained or lost, how many dollars added to or subtracted from the GDP. (Not saying that the tools are accurate, but at least they exist.) But what about things that are beautiful, or that bring people joy? Can that be quantified?

Consider the storm brewing over the latest regulations from the FDA:
Buried deep in the federal government’s voluminous new tobacco regulations is a little-known cost-benefit calculation that public health experts see as potentially poisonous: the happiness quotient. It assumes that the benefits from reducing smoking — fewer early deaths and diseases of the lungs and heart — have to be discounted by 70 percent to offset the loss in pleasure that smokers suffer when they give up their habit.
In one way this makes perfect sense, I mean, people wouldn't smoke if they didn't get something out of it. But if we are going to start making calculations based on happiness, how are we supposed to measure it?
An F.D.A. spokeswoman, Jennifer Haliski, said that there was “still a great deal of uncertainty” surrounding the calculation, and that the agency was helping fund research to explore the issue. She emphasized that the whole purpose of a public comment period was to get the best information before the new regulations became final. “Comments are encouraged and all will be considered,” she said.
A great deal of uncertainty for sure. And bureaucrats hate uncertainty even more than most people:
If the formula for assessing costs and benefits remains unchanged in the final version of the regulations, it could set a dangerous precedent that would constrain public-policy making for years to come, experts and advocates warned.
Certainly if we have to somehow measure, say, the pleasure lost by snowmobilers if they are banned from a certain area, vs. the pleasure gained by cross-country skiers when the engine noise is gone, that could open up unending battles and keep lots of regulations from ever being  finalized. But would that be a good thing or a bad thing?

1 comment:

G. Verloren said...

I can't say I have the solution to quantifying things like happiness, but I can say I find it absurd to discount the benefits by a full 70%.

This measurement might make some degree of sense if we only consider individual happiness - the idea that a single smoker giving up their habit will increase their own lifespan and provide other benefits solely to themselves, to be contrasted with the misery of withdrawal. But smokers do not exist within a vacuum, and their actions affect people around them. You have to take into account the impacts smokers have on non-smokers. These range from the obvious concerns, to the less immediately noticeable ones.

For example, one obvious concern is second hand smoke, which is a potentially huge health problem because a small number of individuals can chronically jeopardize the health of many, many people around them. But, one less noticeable concern is the contribution to pollution and damage to buildings and objects which smokers constitute - not so much on the scale of carbon emmissions and global warming, but certainly on the scale of things like soot and grime in large cities. Cigarette smoke bathes things in a film of filth which slowly builds up over time - as evidence by places like the city of Paris, notorious for its high number of smokers and consequently victim to the residue of the smoke clouds they produce.

There are also the effects smoking has on a location's aesthetics and desireability in the short term. Non-smokers who are made uncomfortable by cigarette smoke are disuaded from patronizing establishments or making use of public spaces where cigarette smoke is common. A relatively small number of smokers can decrease the general desireability of a location by significant amounts, with non-smokers seeking to avoid smoke exposure choosing to go elsewhere if possible. Outdoor concerts, open air markets, smaller public parks, even just the sidewalks or plazas in front of everyday businesses or restaurants - all of them can see substantially reduced visitation from non-smokers wishing to avoid the smoke of others. There are real costs in terms of lost business, or the costs of unutilized public resources like parks and civic events held outdoors.