The Department of Justice is set to propose new rules on Tuesday that would make it easier for people with disabilities to move around public places like office buildings, swimming pools, and miniature-golf courses. According to a government estimate, the changes would cost $23 billion but provide $54 billion in public benefits. How do you calculate the benefits of getting around a miniature golf course?
By estimating how much people would be "willing to pay" to do so. This kind of analysis assumes that it's possible to place a market value on any sort of benefit—from an added year of life expectancy to a marginal increase in someone's comfort. So how do you figure out what someone in a wheelchair would pay to save time getting from one Putt-Putt hole to the next? You could try asking him directly in a survey. But economists find that individuals tend to give wide-ranging and unreliable answers (PDF) when asked to place a value on abstract things. Alternatively, you could try to figure out how much time and energy the new access routes would save the golfer and then convert that into a dollar value.
The analysis commissioned by the Department of Justice started with an estimate of how much each hour was worth to a person with disabilities. This calculation assumes a base value of $4.25 for every hour spent trying to maneuver around an inaccessible mini-golf course. (This is figured at one-half the estimated hourly wage for a person with disabilities.) Then the economists added a "premium" to the hourly rate to account for the fact that waiting around when you want to be golfing can be very frustrating. If changes made the activity itself more pleasurable—like a rule improving sightlines for handicapped seats at the movies—the economists also took that into account.
The analysts had to also estimate how often people with disabilities play miniature golf and whether they would go more often if courses were more wheelchair-friendly. Then they needed to determine how much time those golfers would save via the new requirements. (According to the DoJ, about 7.2 minutes per visit.) Finally, they calculated how much the miniature-golfers would benefit—in total, about $485 million worth over 40 years. The same logic can be applied to figure the benefits of more accessible fishing piers, bowling alleys, and ATMs.
If this all sounds rather imprecise, the economists who calculated it agree. The $31 billion in net benefits is just a middle-ground estimate for the cost over 40 years, which is the average lifespan the DoJ assumed for new buildings. Depending on the assumptions the analysts use, they find that there is a possibility the net gains from the regulations could be as high as $40 billion or as low as $4.7 billion.
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Explainer thanks Peter Blanck of Syracuse University, M. Christine Fotopulos of Penn State's Dickinson School of Law, and Cass Sunstein of the University of Chicago Law School.