Since the early 1980s, federal regulatory agencies have produced regulatory impact analyses (RIAs) for major regulations that include an estimate of the expected benefits and costs of the regulation. While observers have both praised and criticized benefit-cost analysis (BCA) since it first became part of the regulatory process, very few have examined the question of what determines the effectiveness of the economists producing the analysis. When do decision makers listen to the economists, and when are the economists ignored?
Yet many drones weighing more than 250g are little more than toys. Do they really pose a risk to the airspace? To explore this question, we examine 25 years of data from the FAA’s wildlife strike database. Although aircraft collide with birds many thousands of times per year, only a tiny fraction of those collisions result in damage to the aircraft, much less human injuries or deaths. The most serious reported incidents typically involved flocks of large birds. Since the addition of UAS to the airspace is similar in many respects to an increase in the bird population, we conclude that the risk to the airspace caused by small drones (for example, weighing up to 2kg, or 4.41 pounds) flying in solitary formation is minimal.
Frustration over federal budget gridlock is fueling renewed interest in reforming the congressional budget process. Timely, effective budgeting has proven increasingly elusive for both Democratic and Republican Congresses—both of which have had to rely on temporary funding measures to bridge between one fiscal year and the next. One proposal getting significant attention in Congress is a move away from an annual budget to a biennial budget.
For more than three decades, presidents have required executive branch regulatory agencies to identify the systemic problems they wish to solve when issuing major regulatory actions. The first principle in Executive Order 12866, which governs executive branch regulatory review, is that an agency shall “identify the problem that it intends to address (including, where applicable, the failures of private markets or public institutions that warrant new agency action) as well as assess the significance of that problem.” This principle reflects the sensible notion that before proposing regulation, regulators should understand the root cause of the problem the proposed regulation is supposed to solve.
The Affordable Care Act (ACA) is known primarily for its provisions that subsidize and regulate health insurance for the working-age population and their families, but it also made many important changes to the Medicare program. Perhaps the most important of those changes is a new upper limit on Medicare spending, enforced by the Independent Payment Advisory Board, or IPAB.
Advances in information technology and knowledge of human health have the potential to revolutionize the way medical care is delivered to patients over the coming decade. Americans could get better health care, at less cost, if those delivering services to patients have the freedom to take full advantage of what these advances make possible.
Taxpayers who make contributions to approved charitable organizations can deduct those contributions from their income before computing their tax liability. In fiscal year 2014, the deduction lowered taxes by $47 billion, with over 93 percent of the benefits going to tax filers under the individual income tax rather than the corporate tax. Most taxpayers would benefit from removing the deduction and lowering tax rates since most taxpayers do not use the deduction regularly. The only economic justification for the deduction would be to encourage donations to organizations that provide public goods or quasi-public goods. It is unclear, however, that the charitable deduction actually encourages private sector provision of these goods.
We report on new data received from the Internal Revenue Service that sheds light on the changes in independent contracting. Our data support the claim that there has been an increase in nontraditional employment, but the data refute the idea that this increase is caused by the sharing-economy firms that have arisen since 2008. Instead, we view the rise of sharing-economy firms as a response to a stagnant traditional labor sector and a product of the growing independent workforce.
Betcha can’t eat just one.” The slogan of the bestselling potato chip brand was not just an advertising success—it also revealed a deeper behavioral economic insight. For some people, the current, acting person seems to lack the self-control we imagine the person will desire in the future. The fleeting pleasure of a salty, crunchy chip in the present outweighs the future desire to fit into a pair of skinny jeans. The trouble is not that consumers are overly impatient per se, rather that choices are inconsistent and desires change over time. A decision is made to eat a tasty chip today with the expectation that a diet will start tomorrow. But when tomorrow becomes today, another chip awaits and the diet is put off until another day.
In an increasingly global economy, national governments are searching for ways to keep corporations from moving highly valuable intellectual property and associated economic activity to lower tax jurisdictions. In particular, governments are concerned with losing jobs, investment that fosters innovation, and the tax base attributable to income arising from intellectual property. One proposed solution is a patent box, also called an innovation box. A patent box lowers the rate of corporate income taxes paid on income originating from targeted intellectual property.
Camille Paglia joins Tyler Cowen for a conversation on the brilliance of Bowie, lamb vindaloo, her lifestyle of observation, why writers need real jobs, Star Wars, Harold Bloom, Amelia Earhart, Edmund Spenser, Brazil, and why she is most definitely not a cultural conservative.
Join us for a discussion with Mercatus Research Fellow Christopher Koopman, who will explain the greatest threats to capitalism today and what reforms could put us on the path to the next Industrial Revolution.
In this book, Adam Thierer argues that if the former disposition, “the precautionary principle,” trumps the latter, “permissionless innovation,” the result will be fewer services, lower-quality goods, higher prices, diminished economic growth, and a decline in the overall standard of living.