The Economic Significance of 'Insignificant' Rules

24 Pages Posted: 20 Sep 2006

See all articles by Robert W. Hahn

Robert W. Hahn

Technology Policy Institute; University of Oxford, Smith School

Caroline Cecot

George Mason University - Antonin Scalia Law School, Faculty

Date Written: September 2006


We know relatively little about the economic impacts of "minor" or "insignificant" rules because they are not typically analyzed. Yet, these rules could be important, particularly when we consider their aggregate impacts. We provide an economic analysis of one proposed rule to control hazardous air pollutants, which is not considered to be economically significant. This rule is of particular interest because it is likely to be the first in a long series of rules that EPA will use to address residual risk from hazardous air pollutants over the next several years. Our analysis suggests that the proposed controls that EPA considers are not likely to pass a benefit-cost test. We recommend that agencies consider applying a rule of thumb that would specify a threshold level of risk reduction that needs to be achieved before some kinds of regulation are considered. In addition, agencies should consider using lower quality cost-benefit analyses for problems in which the value of information is likely to be lower.

We believe that it is important to consider the impact of small rules more carefully at all levels of government. One way of addressing the problem would be to choose a list of small rules at random and examine their economic consequences. This research could provide insights into the potential economic importance of such rules. It could also provide information on how to utilize analysis and analytical resources more effectively to improve public policy.

Keywords: rules, EPA, cost-benefit analysis

JEL Classification: H00

Suggested Citation

Hahn, Robert W. and Cecot, Caroline, The Economic Significance of 'Insignificant' Rules (September 2006). AEI-Brookings Joint Center Working Paper No. RA06-06, Available at SSRN: or

Robert W. Hahn (Contact Author)

Technology Policy Institute ( email )

1401 Eye St. NW
Suite 505
Washington, DC 20005
United States

University of Oxford, Smith School ( email )

United Kingdom

Caroline Cecot

George Mason University - Antonin Scalia Law School, Faculty ( email )

3301 Fairfax Drive
Arlington, VA 22201
United States

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