In the 1960s, the people of the United States became increasingly
aware that the fruits of economic development were infected by the rot
of environmental deterioration. Late in the decade and early in the 1970s,
concern grew to such an extent that a number of laws were passed by
the Congress aimed not only at stemming the deterioration of the
environment, but improving its quality as well. As we move into the
1980s, environmental concerns--as attested by public opinion polls--
remain vitally alive, but we face other major national difficulties as well.
The economy is weak, productivity growth remains low, inflationary
pressures still exist, and there appears to be no immediate hope for major
improvement. In this adverse economic atmosphere, there is heightened
interest as to whether the costly environmental regulations that have
been put in place are, in fact, worthwhile. In trying to shed some light
on this question, appeal is often made to an economic evaluation method
called benefit-cost analysis.

Benefit-cost analysis was developed initially to evaluate water resources
investments by the federal water agencies, principally the U.S. Bureau

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