ABSTRACT
Cost-benefit analysis (CBA) seeks to measure all the costs and all the benefits of a proposed project or policy in monetary units. CBAs normally consider various alternatives, including a baseline or 'no action' option. In October 2015 the US Environmental Protection Agency announced a decision to lower the national standard for ground-level ozone from 75 to 70 parts per billion. It is also important to note that a bottom-line estimate of net benefits does not tell us anything about the distribution of costs and benefits across society. Real or inflation-adjusted dollars monetary estimates that account for changes in price levels (i.e., inflation) over time. The choice of a discount rate is an important decision in any CBA. Economists seek to estimate how people value relatively minor changes in their risk of dying and use this information to infer the value of a statistical life (VSL).
