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Integrating Risk Assessment and Economics for Regulatory Decisions



On December 7, 2000, more than 100 people attended the Integrating Risk Assessment and Economics Conference at USDA's Waugh Auditorium in Washington D.C.

The conference was sponsored by Farm Foundation, the U.S. Department of Agriculture's Office of the Chief Economist, Office of Risk Assessment and Cost-Benefit Analysis (ORACBA), and the Economic Research Service. Twenty-five speakers from the fields of risk assessment, ecology, epidemiology, plant and veterinary sciences, economics, decision science and public policy discussed various aspects of the regulatory process and presented case studies. These speakers were from four United States Department of Agriculture agencies: the Animal and Plant Health Inspection Service, the Economic Research Service, the Office of the Chief Economist and the Office of General Council. In addition there were speakers from (or formerly from) the Food and Drug Administration, Office of Management and Budget, AEI-Brookings Joint Center for Regulatory Studies, and various academic institutes.

Keith Collins, the Chief Economist for USDA opened the conference with a description of a future goal in the Office of the Chief Economist to improve the review process with regards to risk assessment and cost-benefit analysis. Jim Schaub, Acting Director of ORACBA followed with an overview of the analyses required for regulatory actions and the role ORACBA has played.

Presentations detailing what reviewers historically have looked for in a risk assessment and cost-benefit analysis were given by Alwynelle Ahl, former director of ORACBA and Lisa Grove, formerly of OMB. The conference then looked at USDA's experience in getting risk assessments and cost-benefit analysis through the review process. Randy Lutter, from the Joint Center for Regulatory Studies at the American Enterprise Institute and the Brookings Institute discussed the quality of federal agency risk assessments and the OMB Review clearance process.

Tom Bundy, Deputy Assistant General Counsel for FSIS at USDA followed highlighting some of the legal problems when risk assessments and cost-benefit analysis are not consistent. Following this background, speakers from the fields of risk assessment, ecology, epidemiology, plant, veterinary sciences, economics, decision science, and public policy presented eight case studies in which analysts had tried to integrate the two types of analysis. Each group of presentations was followed by a brief discussion period. Discussions took an interdisciplinary look at various approaches used to integrate economics with risk assessment in the areas of human, animal, plant, and environmental health and laid the foundation for further dialogue.

Attendee evaluations indicate a need for continued exploration of the integration of risk assessment and cost-benefit analysis within the regulatory framework. Judging by written evaluations and hallway comments this was a much needed and welcomed first step in the integration process. Attendees appreciated the opportunity for dialogue but wanted to see more time set aside for discussion at future meetings.

Areas suggested for future exploration included: problems one encounters in the nuts and bolts of integrating the outcome of risk assessments with the inputs of economic analysis, and the overlap between the two; step-by-step analysis of the use of risk assessments and economic analysis in making policy decisions; and how probabilistic risk analysis were successfully used to resolve trade issues. Attendees also would like to see case studies from other countries and agencies outside agriculture.

One of the outcomes from this conference is a white paper that is currently being prepared on the conference highlighting the main points of each of the presentation. This white paper will be made available on ORACBA's website. Another second outcome is that ORACBA is exploring the possibility of entering into several cooperative agreements with University's to work on developing improved methodologies for integrating these types of analysis. A third outcome is that the meeting provided a forum for creating a networking capacity for economists and risk assessors. In the future ORACBA hopes to hold a similar conference that will focus more on the methodologies that have been used and discussion of what works and what doesn't.





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