Risk assessment and environmental benefits analysis.

Benefits analysis applied to regulations involving health risks, such as primary air quality standards, faces two types of uncertainty: 1) the absence of information concerning the supply of and demand for regulated air quality; and 2) the lack of information on thresholds defining air quality health standards. When these uncertainties interact, they define 'net social risk', modeled as a social welfare constraint on maximization of regulatory benefits. This risk can be lowered by raising standards or by reducing regulatory and scientific uncertainty. Current policy does neither, limiting options for regulatory efficiency and raising net social risks.-Author