Conceptualizing Administrative Costs

but the extra administrative costs of targeting (CDEF) are small in relation to the savings in benefits paid to the nonpoor children (HGJK). This simple illustration probably underestimates the value that extra administrative costs can have on targeting outcomes. First, it does not capture the value that 

In thinking about whether household targeting systems such as those in table 4.3 would be affordable in a new setting, three factors should be taken into account. First, some adjustments in pricing may be sensible, as labor usually accounts for the largest share of costs and its price is quite variable. To solve this problem in extrapolating lessons from U.S. el ibility processes for Latin America, Castaneda and Lindert (2005) approximate 

FOR PROTECnONAND PROMOWN THE DESIGN AND IMPLfMENTAWN OF EFFECTIVE SAFETY NETS 

TABLE 4.2 Administrative Costs of Targeting for Soioctod Means-Tested and Proxy Means-Tested Programs, Variens Years 

Countiy, pregram, and year Administrative cests Pregram cests us / beneficiary 

---

Indirectly, implicit user costs do bear on the decisions at NHTSA, but with quite different results. If public resistance to the restraint standard increases with implicit user costs then each of the last three major decisions by NHTSA reflect cognizance of implidt costs. Secretary of Transportation Coleman devised a demonstration program to test and enhance consumer acceptance. Secretary Adams dismissed the Coleman Rule and required passive restraints on the basis that public acceptance does not matter, and Secretary Lewis rescinded the requirement citing potential adverse consumer reaction. Viewed in this light all three secretaries had to deal with implicit costs. Ultimately administrative judgment will be required on passive restraints but explicit incorporation of user costs into benefit-cost analysis is conceptually appropriate. In one sense it is as a measure of public resistance. 

---