Kenneth Acks, CEO of the Cost-Benefit Group, LLC www.costbenefitgroup.com will present a paper on "Economic Rents and Cost-Benefit Analysis - Issues Metrics and Application to Health and Energy Policy" at the Ninth Annual Conference and Meeting of the Society for Benefit-Cost Analysis.
The conference, entitled "Improving the Theory and Practice of Benefit-Cost Analysis" will be held at the The Marvin Center at the George Washington University; 800 21st St. NW, Washington, D.C. 20052 from Wednesday March 15th through Friday March 17th, 2016.
The Society for Benefit-Cost Analysis (SBCA) is an international group of practitioners, academics and others who are working to improve the theory and application of the tools of benefit-cost analysis. The conference features experts from around the world, and last year included Senators Heidi Heitkamp (D) of North Dakota and Senator James Lankford (R) of Oklahom and researchers from Harvard, Stanford, Princeton and Columbia Universities; the Universities of Chicago, and California Berkeley; the US Environmental Protection Agency (EPA), the Food and Drug Administration (FDA), the Department of Agriculture (USDA) and the International Trade Commission (ITC); Resources for the Future; and from Austria, Canada, Croatia, Finland, the Netherlands and Sweden.
Registration and general conference information is available at https://benefitcostanalysis.org/2017-annual-conference
The abstract follows:
Liberals and conservatives agree that the use of government power by special interests often produces suboptimal outcomes, market distortions, unfairness and inequality. Much of the influence results in the generation of economic rents. Economic rent is any payment to a factor of production in excess of the cost needed to bring that factor into production. In classical economics, economic rent is any payment made or benefit received for non-produced inputs such as location (land) and for assets formed by creating official privilege over natural opportunities (e.g., patents). In neoclassical economics rent also includes income gained by beneficiaries of other contrived exclusivity, such as corruption. Liberals often attribute rents to natural market dynamics whereas conservatives point to government policies.
Rents have been of interest to economists from Adam Smith, who noted that “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” Anne Kruger coined the term in 1974. Mancur Olsen (in The Logic of Collective Action), Gordon Tullock and other politico-economists revived and modernized the discussion. Nobel Prize winner Joseph Stiglitz recently emphasized the importance of rents. In “A Firm-Level Perspective on the Role of Rents in the Rise in Inequality” (2015) Jason Furman Chair of the CEA and Peter Orzag use firm-level data to argue that there has been a trend of increased dispersion of returns to capital across firms, with an increasingly large fraction of firms getting returns over 10-30% annually ...
This paper will discuss how the generation of rents can affect Benefit-Cost Analysis in general, and with respect to the energy, health care and finance industries. The "Theory of the Second Best" will also be applied and discussed.
This will be the sixth time Mr. Acks has invited to make a presentation or chair a session at this prestigious conference. In the past Mr. Acks presented "The Costs and Benefits of Recycling in New York City"; “A Dynamic Analysis of the Costs and Benefits of a Smart Growth/Sprawl Reduction Program in 1988, 2008 and 2013" https://benefitcostanalysis.org/events/2014-conference/agenda, “The Costs and Benefits of 1,000 Green Roofs in New York City” http://benefitcostanalysis.org/events/2011-conference-agenda and “The Costs and Benefits of a Green Mixed-Use Brownfield Redevelopment Project in NY” http://tinyurl.com/z4dk4ag at conferences of the Society for Benefit Cost Analysis from 2008 through 2014. He also chaired two sessions for the Society, and has given presentations on “The Social Cost of Carbon” before the Manhattan Chamber of Commerce Environment Committee http://www.manhattancc.org/events/eventdetail.aspx?EventID=653; “The Economic Impact of Environmental Liabilities on Real Estate Values” before The Auditing Roundtable; "A Framework for Analyzing the Costs and Benefits of Green Roofs: Second Stage Results” at a conference of the United States Society for Ecological Economics (USSEE)2007 http://www.ussee.org/PDFs/Program_Book_June_21_2007.pdf and “Environmental Values” at a Carnegie Council on Ethics and International Affairs colloquium; and given guest lectures at Columbia University, Pratt Institute and Brooklyn College. The talks have drawn upon Mr. Acks' 35 years of expertise as a consultant in Environmental Economics and Real Estate Valuation during during which time he has produced studies of more than 950 projects worth over $4.5 billion in 140 counties and 28 states. Mr. Acks also edits Environmental Valuation and Cost-Benefit News www.envirovaluation.org.