Parametric cost-benefit analysis applied to underwater pipeline safety

Policy alternatives must often be evaluated without the benefit of experimentation to determine the effectiveness of each one. A parametric approach to dealing with this problem is presented for the case of deciding on the appropriate degree of deregulation, if any, for the use of signs to prevent accidents involving damage to underwater pipelines. The information obtained demonstrates whether experimentation would have been advantageous and, if so, how the policy conclusions would have been affected.