Much attention is now focused on better understanding how regulatory impacts are distributed across advantaged and disadvantaged populations, yet little attention is being paid to methods for assessing the distribution of costs for individual rules. Understanding how costs initially imposed on industry are distributed across individuals in different income or other groups is essential to estimating the extent to which net benefits aggravate or ameliorate existing inequities. Some researchers have investigated the distribution of aggregate costs across many regulations or assessed the general equilibrium effects of large individual regulations. Little is known, however, about the extent to which the costs of smaller regulations are passed on as price increases, wage decreases, or reduced returns to capital. The distributional effects of passing on costs via each pathway are also not well-understood. The heightened attention to distribution stems in part from increasing awareness of existing inequities and in part from President Biden’s Modernizing Regulatory Review executive order and update of the best practice guidance in OMB’s Circular A-4, “Regulatory Analysis.” However, similar emphasis can be found in presidential executive orders dating back to 1993, and reviews suggest that little analysis of distributional impacts has been completed.
This roundtable brings together leading experts across policy areas to discuss possible methodological improvements, focusing on U.S. regulations. The panel will also discuss issues related to agency authority to address any inequities they find when they conduct these analyses, given that the lack of such authority may inhibit attention to assessing and addressing these impacts.
JEL codes: D30, D61, D63, H23, I18, Q58
Washington Center for Equitable Growth
National Center for Environmental Economics and U.S. Environmental Protection Agency