EPA has used benefit-cost analysis for many years as one of several sources of information on the impacts of alternative policy choices. Traditionally, the cost side of the analysis includes estimating the expenditures needed to comply with new regulations (e.g., to install contaminant removal technologies) and determining the market effects of these expenditures (e.g., the cost increase to the household water bill). The benefits side of the analysis generally focuses on the effects of reducing exposure to contaminants, including effects on human health and the environment. In order to develop quantifiable estimates for these benefits and costs, many non-economic analyses need to be developed, such as methods for evaluating dose-response relationships for critical and noncritical effects. Also required are additional analyses of subgroups of the population that may be more sensitive than the general population to exposure to contaminants in drinking water.
How does cost factor in when it comes to regulation development?
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