Viscusi Circular A-4 Peer Review Comments and Guidance for Future Revisions

Abstract This article presents my 2023 peer review panel comments on the 2023 Office of Management and Budget (OMB) Circular A-4 and offers recommendations for future revisions of this circular. The Prologue section introduces my official peer review comments and indicates how the structure of my comments was tailored to the guidelines established by the OMB. The main section consists of my 2023 peer review comments as they were submitted to OMB. I recommended changes in the draft Circular A-4 to increase the discount rate from the 1.7% rate that OMB proposed, to report domestic benefits whenever global benefits are reported, to adopt a behavioral transfer test for the use of behavioral economics findings, to update the procedures for estimating the value of a statistical life, and to abandon the proposed distributional weights. The most problematic component of the new Circular A-4 is the OMB distributional weights, which will shift the role of benefit–cost analyses away from the current role of providing an efficiency-oriented test. The Epilogue to my comments summarizes how the final version of Circular A-4 differs from the draft version and how future administrations might revise Circular A-4 after President Trump rescinded it.