Wall Street Journal reporter Mike Spector writes on the draft agreement within the Congressional leadership on Corporate Average Fuel Economy (CAFE) standards. The text of the bill is not yet available, but Spector’s reporting provides useful information.
Category Archives: Dot
Regulation is widely understood as a tax on the activity or person being regulated. Where these activities repair genuine market failures, benefits from regulation may result. If there are benefits from, say, automobile safety regulation, one would expect the beneficiaries to be persons who otherwise would have been killed or injured at the pre-regulatory safety level.
But what about the costs of regulation? Who bears them?
A recent story involving an erroneous test report about child safety seats published byConsumer Reports shows how information quality is not just a concern related to information disseminated by the federal government.
It also illustrates the value of genuinely independent peer review. Consumer Reports is published by Consumers Union, a nonprofit organization that does much more than product testing. It is an activist organization that routinely takes strong positions on a wide range of public policy issues, including child safety seats.
CU’s activism creates an inherent conflict of interest with its product testing functions. Credibility as a product safety tester requires, at a minimum, an extraordinarily rigorous program of independent peer review. Currently, CU relies solely on internal peer review.
Getting Better Information About Air Travel Delays
How benefit-cost analysis and information quality principles can solve the problem
In the wake of JetBlue’s latest problems, air travel in general is getting more attention. Much of this is focused on various proposals for air travel “customers bills of rights.” We’ve shown that CBORs don’t (and possibly can’t) address every circumstance of interest. They also have the peculiar effect of taking service quality out of the domain in which airlines can compete. An alternative approach not only allows airlines to compete on service quality, but encourages them to do so.
One requirement for this to work is passengers have to have access to high-quality information that addresses the kind of service quality questions they care about. The Department of Transportation has issued regulations concerning air travel delays. There is mounting evidence that these rules have not yielded the kind of information passengers need.
JetBlue’s Test of Pilot Fatigue Rule Upsets Regulatory Apple Cart
There’s a way for firms to do regulatory research more effectively
Wall Street Journal reporters Andy Pasztor and Susan Carey describe (subscription may be required) detailed human factors research JetBlue performed with FAA district office approval to test the longstanding assumption that, under certain conditions, pilots can safely fly longer than Federal Aviation Administration rules permit. The result: an unflattering portrayal on Page One of the Journal, a punitive regulatory response from FAA headquarters, and an FAA threat to further punish JetBlue by indefinitely delaying any review of the scientific merits of its hours of service limits for pilots.
In retrospect, adherence to the procedures and standards of the Paperwork Reduction Act and Information Quality Act might have been a better way for JetBlue to proceed — even though the PRA doesn’t apply to regulated entities.
In an July 7 editorial, the Wall Street Journal says “No.” But the editorial has a number of errors that make this conclusion suspect. The editorial also compares the incidence of U.S. highway fatalities and U.S. combat deaths in Iraq, a comparison that is both technically incorrect and hard to interpret.
The Journal editorial, titled “Safe at Any Speed” (subscription may be required), claims that there has been a steady decline in the highway fatality rate since 1994, and therefore repeal of the 55 miles per hour nationwide speed limit in 1995 has been vindicated. This appears to be based largely on a 1999 analysis by Stephen Moore, who at the time was director of fiscal policy studies at the Cato Institute and now is a member of the Journal editorial board.