Obama DHHS should look beyond economists when assessing consumer surplus

All the criticism of the FDA's application of a "consumer surplus" discount to substantially offset the benefits of reducing smoking because of the lost pleasure of smoking has led the Department of Health and Human Services to convene an expert committee of economists to assess using consume surplus in this way.
 
While this is a step forward, the fact that the Department has only involved economists in the discussion has excluded a wide range of scientific knowledge and perspectives from this discussion, which seriously biases the outcome of these deliberations in favor of continuing the application of a consumer surplus discount, even though the rate may be moderated.
 
Anna Song and I recently published a commentary on a paper published in Tobacco Control by a respected group of economists criticizing the FDA addresses this point in Tobacco Control, which is available.  It states, in part:
 

Another illustration of the difficulties with limiting the analysis to purely an economic perspective is illustrated by the economists’ critique of the FDA in this issue of Tobacco Control when they state that We decided that it was most informative to separate smokers into those who became regular smokers before the legal age of smoking [18 years old in most places], and those who become regular smokers thereafter. For the former group, society has clearly decided that the decision to initiate smoking is an irrational decision and any changes in their conventionally-calculated consumer surplus resulting from changes in their tobacco use in response to [graphical health warning labels] or other actions should not be counted as a cost in the economic impact analysis of FDA’s rules on tobacco…We refer to this as the ‘principle of insufficient reason’ approach and argue that the benefits to those who started using tobacco products regularly before 18 years of age and who quit in response to FDA regulatory actions should not have any offset for lost consumer surplus.

While appropriately noting that consumer surplus makes no sense when applied to smokers who started before they had the capacity to make rational decisions, it ignores the fact that the decision on what age to regulate smoking is a political not a scientific decision. Indeed, recent advances in neuroscience suggest that the brain continues to mature into one’s 20s, well beyond the legal cigarettes. These brain imaging studies also demonstrate that one of the last areas to mature are the areas critical for impulse control and critical thinking.  Moreover, empirical evidence consistently shows that adults cannot accurately predict their own emotional reactions and experiences, particularly when dealing with an addictive substance.
 
Properly considering these issues and integrating them into its assessment of proposed regulations will require the FDA and the Department of Health and Human Services to move beyond the narrow view that only economists have standing to contribute to this analysis. At a minimum, behavioural scientists and neurobiologists need to be among the experts evaluating the government’s approach to these issues.