Peter H. Huang Harold E. Kohn Chair Professor of Law James ...

Emotional Impact Analysis
IV. Conceptual and Measurement Issues with Emotional Impact Analysis
A precursor to EIA is research by Richard Zerbe, Jr. and his co-authors about incorporating moral
sentiments into CBA. 235 Zerbe’s approach confronted and tackled conceptual difficulties and issues about
including moral sentiments in CBA. This Article advocates counting and including not only moral
sentiments in analyzing policy, but also emotional impacts. But Zerbe’s approach bracketed any
discussion of measurement issues associated with incorporating moral sentiments into CBA. Fortunately,
many issues that measuring and quantifying emotional impacts have been addressed already in empirical,
experimental, and theoretical research by economists and psychologists about happiness. Indeed,
happiness is an alternative metric to money or wealth for measuring emotional impacts.
There is a variety of emotional impacts that EIA might helpfully incorporate, including
distributional or equity concerns, 236 ethical considerations, 237 moral consequences, 238 and process
concerns. 239 But if regulators are to incorporate these affective variables into their policy deliberations and
evaluations, then regulators must be able to consistently quantify or measure such variables in order to
improve upon their decision-making process by adding such affective variables to CBA. Fortunately,
there are several precursors to EIA, including arguably Adam Smith’s first book, The Theory of Moral
Sentiments (1759), published seventeen years before his famous book, The Wealth of Nations (1776). 240
A. Moral (and Immoral) Sentiments
EIA builds upon research analyzing the desirability and feasibility of policy makers taking into
account moral sentiments. Zerbe utilizes the phrase “moral sentiments” to mean concern for other people,
beings, or entities in the form of paternalistic or non-paternalistic altruistic preferences. People clearly
feel moral sentiments as defined here. Thus, moral sentiments are particular examples or forms of
234 See generally Eric A. Posner & Cass R. Sunstein, Dollars and Death, 72 U. CHI. L. REV. 537 (2005).
235 See e.g., Richard O. Zerbe, Jr., Should Moral Sentiments Be Incorporated into Cost-benefit Analysis? An
Example of Long-Term Discounting¸ POL’Y SCI. (2006).
236 See generally, LOUIS KAPLOW & STEVEN SHAVELL, FAIRNESS VERSUS WELFARE (2002).
237 See generally, JOHN R. BOATRIGHT , ETHICS IN FINANCE (1999).
238 See generally, BENJAMIN M. FRIEDMAN, THE MORAL CONSEQUENCES OF ECONOMIC GROWTH (2005).
239 F. Thomas Juster et al., A Conceptual Framework for the Analysis of Time Allocation Data, in TIME, GOODS, AND
WELL-BEING 113, ? (F. Thomas Juster & Frank P. Stafford eds., 1985).
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