SUMMARY
The issues discussed here reveal the problems in undertaking any cost-benefit analysis and illustrate how that analysis is used in a decision-making process. There is a significant degree of uncertainty involved in detennining the impact of many programs and regulations and in assessing the valuation of these impacts. The case in this chapter showed that these uncertainties arise in assessing air pollution, in estimating the effects of pollution on human health and the enviroment, and in valuing the benefits and costs of regulations to improve air quality. Some of this uncertainty can be dealt with through sensi ttvity analysis and the development of alternative scenarios. The existence of mul ple studies also supports the effectiveness of a program, even if all the studies have some methodological problems. As noted in the discussion of vsL estimates , meta-analyses have increasingly been used to quantitatively integrate findings from numerous studies.
There is a need for economic evaluation studies using the tools of cost effectiveness, cost-utility, and cost-benefit analysis, even given their weaknesses. "Unless mechanisms exist for placing bounds on our risk reduction efforts, we can end up pursuing policies of diminishing marginal impact and diverting resources from more productive uses" (Viscusi 1996, 120). However, there is also a need for more comprehensive and uniform analyses of government regulations and investment programs. This decision-making problem is the greatest challenge inthe future for the economic evaluation of public sector programs, regulations, and interventions . Moreover, it must be remembered that economic evaluations are the decision-making tools, not the decision; that the uncertainties in the analyses should be recognized; and that policy decisions are always influenced by the various stakeholders in the process.