No procedure, no black-box methodology, no deus ex machina can answer these questions for us. The weakness of using neoclassical economic theory to drive policy is that practitioners have convinced one another, as well as a good slice of the affected public, that they are doing something like science when, in fact, they are collecting data and funneling it not only through their a priori market models but also through their explicit and implicit ethical assumptions. As Viscusi amply and clearly demonstrates, risk reduction, as policy choice, is a complicated business. The average person, especially after being subjected to a lifetime of regulatory propaganda, believes in simple regulatory solutions. But as H. L. Mencken observed, for every human problem there is always a neat, simple solution that is, at the same time, just plain wrong.
Regulation fails in part because it induces behavioral changes.
For example, if cars are made safer through regulation, drivers will drive less carefully, thus offsetting at least some of the protection for themselves and increasing the risks to others, such as pedestrians, bicyclists, and motorcyclists. Another effect that confounds the regulatory reduction of risk is the trade-off of wealth and risk. Yet the wealthier a society is, the longer its citizens live. Making people poorer in the name of protecting them in order to lengthen their lives becomes somewhat problematic. In fact, a large increase in national product will do more to save lives than almost any regulation passed in recent decades.