ABSTRACT
For more than twenty years, the United States has made a massive effort to clean up its heavily polluted environment. By 1986, the annual cost in public and private funds had risen to $80 billion—three times greater (in constant dollars) than the expenditures in 1972 (Carlin, Scodari, and Garner 1992). Within the Reagan Administration, concerns were expressed about the cost-effectiveness of these programs, leading the Office of Management and Budget (OMB) to prescribe that, “In deciding whether—or how much—to regulate, a regulatory official must look not only at total risks but also at the risk reduction that could be achieved and the costs of doing so” (U.S. OMB 1987).
