Nutty willingness to pay measure behind EPA's claim that its new regulations will produce $2 trillion in benefits

"Willingness to Pay" surveys ask individuals how much they are willing to pay for some improvement in life. These estimates have traditionally given extreme and unbelievable estimates in many different areas, and the reason is very simple: there is no real cost to me making up whatever number I want. It is not as if anyone ever really expects to pay this amount, and people are given calls without any real time to think about it. In addition, errors are only really allowed in one direction. For example, I can't say that you would need to pay me to agree to the reduction in economic growth that would result from the proposed economic regulations.
Even if people thought that the rules would ever result in policy change, they may not think that they will be the ones to pay it. After all, half of the working people in the US don't pay income tax so if they think that taxes will rise, they might think that burden will entirely be picked up by someone else. A critical evaluation of the EPA claimed benefits from the new Clean Air Act Regulations is available here.

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