Archive for March, 2016
To examine the value of professional investment advice, Professor Wilkinson-Ryan, Kristin, and I recently conducted a study of retail investor retirement decision-making. Our study simulated the process by which an ordinary employee selects among the options in a typical 401(k) plan. We asked subjects to allocate a $10,000 investment among ten investment alternatives based on real-world options, with the goal of maximizing the value of that retirement portfolio at the end of thirty years. We then used an algorithm to simulate the performance of the subjects’ portfolios at the end of thirty years. Using subjects from Amazon Mechanical Turk—an online platform that enables researchers to recruit and pay subjects for performing tasks such as responding to questionnaires or surveys—we sought to determine the financial literacy of ordinary retail investors and to ascertain the relationship between financial literacy and investment performance.
Editor’s Note: The importance of centrally and independently reviewed cost-benefit analyses is increasingly recognized as an essential tool of the modern administrative state. Translation courtesy of Bing Translate. The original French text is available here.
From: La Tribune
A referendum does not assess the public interest of an infrastructure project. Thomas Perroud (Professor of Public Law, University of Aix Marseille) and Nicolas Treich (Toulouse School of Economics, INRA)
From: The Hill | Contributors
By Stuart Shapiro, contributor
All politicians like to claim that their preferred policies are backed by “sound science” or “good analysis.” The fact that they do this so often, and that politicians on opposite sides of an issue make these claims, increases public cynicism. The public justifiably doubts both the claim that a policy is backed by good analysis and, eventually, the worthiness of policy analysis itself. Recent debates on the Keystone XL pipeline, for example, included competing claims about the impacts of approval of the pipeline on both the environment and on the number of jobs created.
Editor’s Note: The failure of procedural requirements to slow the flow of regulations demonstrates that what is needed is a regulatory budget which would place a ceiling, by an act of Congress not a unilateral action by the Executive Branch, on the total cost that a particular regulatory agency can impose on the public to comply with its regulations. See here.
It is puzzling. Administrative agencies continue to produce thousands of rules each year in the face of an accumulation of procedural requirements that administrative law scholars say have ossified rulemaking and even led some agencies to retreat from rulemaking altogether.
From: American Action Forum
By Sam Batkins
Last month, AAF debuted its series tracking regulation in the final year of the Obama Administration. If last month highlighted the high wait times in rules that the White House discharged, February was marked by the historic output of economically significant rules (measures with an impact of $100 million or more). This February, the White House approved 15 economically significant rulemakings. Compared to Februarys in other presidential election years, 2016 was a record-setter; 2004 came in second, with 11 significant regulations.
Regulation is a critical tool in the hands of government to support economic growth and well-being. However, it is often overlooked, with many governments focusing almost all of their energy instead on designing their tax and spending policies. We often hear how politicians raise or reduce taxes or boost or curb public spending to achieve their policy objectives, but only rarely do we hear that they pay attention to the way they develop and enforce regulation. Largely, we take for granted the rules that determine our safety and lifestyle and the playing field of our companies. Yet we should not ignore regulation. When poorly conceived, government rules can result in unintended consequences, excessive costs, or both. Worse, they may not even serve their intended purposes of protecting the public or boosting economic activity.