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Valuing Time in U.S. Department of Health and Human Services Regulatory Impact Analyses: Conceptual Framework and Best Practices

Publication Date

Executive Order 12866, as supplemented by Executive Orders 13563 and 13771, requires that most U.S. government agencies assess the costs, benefits, and other impacts of their major regulations before they are promulgated. Under the leadership of its Office of the Assistant Secretary for Planning and Evaluation, the U.S. Department of Health and Human Services’ (HHS’s) Department-wide Analytics Team recently finalized detailed guidelines for the conduct of HHS regulatory impact analyses. In the process of developing these guidelines, HHS determined that more work was needed on the approaches used to value changes in time use and commissioned the research summarized in this report.

Review of previously completed HHS regulatory impact analyses as well as discussions with HHS staff suggest that the types of time use that most frequently require valuation relate to administrative and other tasks performed by employees on-the-job, and occasionally on their own time, such as drafting reports or filling out forms. Thus we focus largely on valuing time used for administrative and other activities associated with regulatory implementation and compliance.

Our research included three components: (1) examining the conceptual framework and general approach; (2) exploring primary nonmarket valuation research that addresses individual willingness to pay (WTP) or willingness to accept compensation (WTA) for changes in time use; and (3) investigating how to adjust compensation-based measures to reflect taxes and benefits, as well as indirect costs not associated with production of a particular good or provision of a specific service. These indirect costs include, for example, overhead costs such as space rental and utilities, and other costs such as office supplies and administrative oversight.

Related resource: Guidelines for Regulatory Impact Analysis
Related resource: Guidelines for Regulatory Impact Analysis: A Primer