We have read Professor Hosticka's comments on our "Biology-Policy Interface" article with great interest. In essence, Hosticka has concluded that our critical assessment of risk-and cost-benefit analysis is focussed on one narrow area (i.e., deficiencies in the epistemological environment in which the technique is applied) and that we take the inherent value of these techniques for granted. In turn, Hosticka provides a description of other problems which he thinks are more important in the evaluation of cost-benefit analysis as an instrument of social decision making.We are somewhat ambivalent about Hosticka's commentary. On the one hand, he has raised interesting and useful questions concerning the role of risk-and cost-benefit analysis. On the other hand, it is our contention that he has based his case on a critique of how these techniques have been used or misused rather than how they can or should be used. We will divide our remarks into two sections: (i) a reaffirmation of our original thesis, and (ii) a critique of Hosticka's position.
Epistemological Issues in Risk-Benefit AnalysisIt was never our intention to provide an exhaustive treatment of all the complexities and problems inherent in the practical application of risk-and cost-benefit analysis; instead, we chose to focus our discussion on one critical and contentious issue deemed worthy of further analysis. Despite Hosticka's comments, the epistemological issues facing risk-benefit analysis pose non-trivial and indeed substantial challenges to the extent to which this methodology can be utilized in the decision-making process. Risk-benefit is the child of the marriage of cost-benefit analysis and probabilistic risk assessment. As such, it is genetically burdened with some of its parents' imperfections. This methodology was the principal focus of our concern.Risk analysis is a relatively new discipline which has gained increasing attention, and a touch of notoriety, especially through its use in the assessment of energy-related catastrophic accidents (see for example, Lewis, 1978; U.S.N.R.C., 1979). Deficiencies in methodology have constrained its usefulness in the resolution of major public policy