New Foundations of CostBenefit Analysis Author:Matthew D. Adler, Eric A. Posner Cost-benefit analysis (CBA) has been an important policy tool of government since the 1980s, when the Reagan administration ordered that all major new regulations be subjected to a rigorous test of whether their projected benefits would outweigh their costs. Not surprisingly, CBA has been criticized by many who claim that it neglects, especially... more » on the benefit side, important values that are hard to measure. In this book, the authors reconceptualize cost-benefit analysis, arguing that its objective should be overall well-being rather than economic efficiency. They show why the link between preferences and well-being is more complicated than economists have thought. Satisfying a person's preference for some outcome is welfare-enhancing only if he or she is self-interested and well-informed. Also, cost-benefit analysis is not a super-procedure but simply a way to identify welfare-maximizing policies. A separate kind of analysis is required to weigh rights and equal treatment. This book not only places cost-benefit analysis on a firmer theoretical foundation, but also has many practical implications for how government agencies should undertake cost-benefit studies.« less