Regulatory Cost Calculator
About the Mercatus Center's Regulatory Cost Calculator
When regulatory agencies propose regulations, they request comments on the rules from parties that will be affected. Agencies ask stakeholders to comment on the extent of the problem agencies are solving, options for solving those problems, and the costs and benefits of the options. Estimating costs of complying with regulations can be complicated since regulations create costs for businesses, customers, local governments, and other entities. The Mercatus Center’s Regulatory Cost Calculator is a practical tool designed to help businesses and their trade associations assess prospective costs of individual proposed regulations before they become final regulations. Armed with this information, stakeholders can provide accurate and credible estimates of the costs of proposed regulations to regulators, legislators and their staffs, the media, and the public policy community.
Costs of regulation include:
- Direct expenditures on compliance, such as paperwork, new equipment, or employee training;
- The value of owner, manager, or employee time diverted to regulatory compliance;
- Profit forgone on investments the business no longer makes as it is forced to divert resources to regulatory compliance;
- The profit businesses lose and the value consumers lose from the price increases, quality changes, or other sales-reducing behavioral responses induced by regulation;
- The costs of resources that businesses and trade associations expend to influence regulation.
These costs are not always explicit or obvious, because some of them involve lost opportunities rather than expenditures. The purpose of the Cost Calculator is to provide better information on the full cost of regulation by identifying both direct and indirect costs and eliciting information that economists can use to estimate the cost of regulation to customers and our broader society.
Download the Regulatory Cost Calculator
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