Food and Drug Administration says in a little-noticed document released alongside its proposals for regulations in April that the projected benefits of the new rules, which also apply to cigars, hookahs and other vapor products, should be cut by 70 percent to account for the deprivation consumers would suffer.
The approach is regarded as radical among those who have done cost-benefit studies for regulators. Some public health advocates warn it will help the tobacco industry argue that the cost of complying with restrictions on new nicotine products exceeds any benefit to the public, making it easier to scuttle those rules.
They also fear it could be applied more broadly to regulation of products, such as food and alcoholic beverages, that is meant to protect public health. Under executive order signed by "Clark nardinelli fdating" President Bill Clinton, U.
But with novel tobacco and nicotine products, the FDA is putting its thumb on the cost-benefit scale in a way no other agency has before, according to current and former regulators and economists who specialize in such studies. In Clark nardinelli fdating proposed rules, the FDA has already treaded lightly. It would ban the sale of e-cigarettes to anyone under 18, but would not restrict flavored products, online sales or advertising.
The FDA used the same lost-pleasure analysis when it assessed the costs and benefits of requiring graphic warning labels on tobacco products - regulations the industry opposes and that have been blocked by a federal court. That was also little noticed outside a small group of public health advocates and other policy experts. In response to questions from Reuters, an FDA spokeswoman said that even with Clark nardinelli fdating inclusion of the lost-pleasure factor, the benefits of its proposed e-cigarette regulations will still exceed the costs.
She also said the tobacco industry did not pressure the agency to include it in the analysis, which was conducted by in-house economists with no input from political appointees. FDA economists have previously hinted that the agency should apply the idea of lost enjoyment in areas beyond tobacco.
In a paper published online this year the journal Health Economics, they argued that guilty pleasures like junk food and alcohol are so enjoyable the benefits of reducing their use through regulation should be discounted by up to 99 percent. Nardinelli and Lavaty declined to comment.
Lorillard, the biggest seller of e-cigarettes in the U. Loss of pleasure had occasionally been used when analyzing proposals to ban products, Graham said, but was not treated as a deduction from benefits, as the FDA is doing.
Environmental Protection Agency, for instance, has incorporated the concept to reflect that people value things like clean air in ways the market does not always capture, officials said. The EPA has also used lost pleasure when calculating the costs of pesticide regulations to account for the possibility that the price apples may rise if growers "Clark nardinelli fdating" to switch to using more expensive chemicals or lose more of their crop to pests.
Consumers would lose some pleasure if they could afford to buy fewer apples. To be sure, the pleasure factor is a well-established concept in economics, dating back half a century. It may seem counterintuitive that sellers would not charge the maximum tolerable price. But whatever price they pick, there are always consumers willing to pay more, explained economist Stan Veuger of the American Enterprise Institute, a conservative think tank in Washington, D.
The additional amount is the consumer surplus, which economists interpret as the dollar value of the extra utility, or enjoyment, users get.
More problematic, he and others argue, is applying the idea of consumer enjoyment to an addictive product like nicotine. Once a product becomes addictive, rational consumer choice goes out the window, said economist Ken Warner of the University of Michigan.
In addition, nearly three-quarters of smokers say they would like to quit. He said that means the concept is not relevant to the vast majority of tobacco users. Public health advocates are concerned about what will happen if agencies charged with protecting consumers also give Clark nardinelli fdating weight to the enjoyment people get from all kinds of things that have been a focus of regulation - from eating food containing trans fats to riding motorcycles without a helmet.
In the FDA document published online, the staff economists cite a paper by health economist Jonathan Gruber of MIT as a source for their 70 percent assessment. See here for a complete list of exchanges and delays. Answers On Innovation Thomson