An Application of Health–Health Analysis: Crystalline Silica Regulation in California

Economic analyses of environmental regulations of human carcinogens have generally focused on the cost per life saved of the proposed regulation. The work of Viscusi and Wildavsky has demonstrated that such an approach considers only one side of the issue. The relationship between the level of wealth and the health of the population is not addressed in the traditional analyses. This paper uses the results of the research by Viscusi and Lutter and Morrall as a foundation to examine the proposed regulation of respirable crystalline silica as a human carcinogen by California. The primary conclusion is that the costs in terms of the health effects of the regulations due to reduced wealth may be greater than the benefits associated with the regulation. Therefore, at this time it would be better to devote scarce resources toward further study to remove the uncertainty associated with the regulation of ambient concentrations of crystalline silica. The question as to how much insurance to buy in this uncertain case must consider both the benefits of the regulation and the costs in terms of reduced wealth.