Two Cheers for Feasible Regulation: A Modest Response to Masur and Posner

Abstract

This article compares the relative merits of feasibility and cost-benefit based regulation, responding to a recent article by Jonathan Masur and Eric Posner on this topic. Normatively, it shows that the lack of correlation between non-subsistence consumption and welfare supports the argument that regulation should be strict, unless widespread plant shutdowns, which would seriously impact well-being, are involved. It shows that a host of practical defects Masur and Posner find in feasibility analysis would infect cost-benefit analysis as well. In light of the importance of cost's distribution, serious regard for individual well-being supports the feasibility principle better than a cost-benefit test.

Keywords: cost-benefit analysis, feasibility analysis, feasibility principle, optimality, regulation, well-being, plant shutdowns, unemployment

JEL Classification: A12, A13, D61, I18, K32