I **
USSi
EPA 550/9-77-352
SEPTEMBER 1976
U.S. Environmental Protection Agency
Office of Noise Abatement and Control
Washington, D.C. 20460
-------
TECHNICAL REPORT DATA
(Please read Instructions on the reverse before completingj
'ฆIWW9-77-352
3. RECIPIENT'S ACCESSIOC+NO.
4. TITLE AND SUBTITLE
Economic/Social Impact of Occupational Noise
Exposure Regulations
5. REPORT DATE
September 1976
6. PERFORMING ORGANIZATION CODE
7. AUTHOR(S)
Nicholas A. Ashford, Dale Hattis, Eric M. Zolt,
Judith I. Katz, George R. Heaton
8. PERFORMING ORGANIZATION REPORT NO.
Report No. CPA/wp 76-15
9. PERFORMING ORGANIZATION NAME AND ADDRESS
Center for Policy Alternatives
Massachusetts Institute of Technology
Cambridge, Massachusetts 02139
10. PROGRAM ELEMENT NO.
11. CONTRACT/GRANT NO.
12. SPONSORING AGENCY NAME AND ADDRESS
U.S. Environmental Protection Agency
Office of Noise Abatement and Control
Washington, D.C. 20460
13. TYPE OF REPORT AND PERIOD COVERED
14. SPONSORING AGENCY CODE
15. SUPPLEMENTARY NOTES
16. ABSTRACT
This report elaborates on the costs and benefits associated with alternative
occupational noise exposure regulations. The limitations of cost/benefit
analysis for social decision-making are enunciated. The impact of various
regulatory alternatives for 85 dBA and 90 dBA criteria are analyzed.
17. KEY WORDS AND DOCUMENT ANALYSIS
a. DESCRIPTORS
b. i DENTIFIE RS/OPEN ENDED TERMS
c. cosati Field/Croup
occupational noise, occupational health
and safety, regulatory alternatives,
health effects of noise, cost/benefit
analysis of occupational noise regulations
18. DISTRIBUTION STATEMENT
General distribution to all interested
parties
19. SECURITY CLASS (ThisReport)
21. NO. OF PAGES
20. SECURITY CLASS (Thispage)
22. PRICE
EPA Form 2220-1 (9-73)
-------
EPA 550/9-77-352
ECONOMIC/SOCIAL IMPACT OF
OCCUPATIONAL NOISE EXPOSURE REGULATIONS
Testimony Presented at the OSHA Hearings on
the Economic Impact of
Occupational Noise Exposure
Washington, D.C.
SEPTEMBER 1976
This report has been approved for general availability. The contents of
this report reflect the views of the contractor, who is responsible for
the facts and the accuracy of the data presented herein, and do not
necessarily reflect the official views or policy of EPA. This report does
not constitute a standard, specification, or regulation.
-------
PREFACE
The information and analysis contained in this report were
presented by Dr. Nicholas A. Ashford at public hearings conducted
by the Department of Labor's Occupational Safety and Health
Administration in October 1976, regarding the proposed Occupational
Noise Exposure Regulation. He was accompanied by Dr. Dale Hattis
and Mr. Eric Zolt. Dr. Ashford is a senior staff member of the
Center for Policy Alternatives at the Massachusetts Institute of
Technology, and has had graduate training in science, law and
economics. Dr. Hattis is an environmental scientist and Mr. Zolt is
a certified public accountant and has graduate training in both
law and business economics.
This report builds on research performed earlier by the Center
for Policy Alternatives which was the subject of a report entitled
"Some Considerations in Choosing an Occupational Noise Exposure
Regulation", dated February 1976.
The testimony derived from this report was not intended to
recommend a safe noise exposure level. Rather, it presents a
methodology for analyzing the true costs and benefits of alternative
regulatory requirements.
-------
CONTENTS
Page
1. Introduction 1-1
2. The Usefulness of Cost-Benefit and Economic Impact Analyses 2-1
The Justification for Government Intervention in
Occupational or Environmental Health Hatters 2-1
The Appropriateness of Cost-Benefit Analysis for Making
Social Decisions 2-3
The Mandate of the OSHAct 2-5
The OSHA Inflationary Impact Statement 2-7
3. Summary of Findings 3"1
3.1 Usefulness of Cost-Benefit and Economic Impact Analyses 3"1
3.2 Costs 3-2
Methodological Conclusions 3"2
Results 3_2
3.3 Benefits 3_3
Methodological Conclusions 3~3
Results 3-4
3.4 Cost-Benefit 3"5
3.5 The Choice of Compliance Scenarios 3~6
4. Costs 4-1
4.1 Evaluation of the Cost Estimates in the Aggregate 4-1
Failure to Discount Capital and Maintenance
Expenditures over Proposed Compliance Periods 4-1
Maintenance Costs 4-4
45-Year Time Frame Analysis 4-4
After Tax Cost of Compliance 4-5
Uncertainties in the Underlying Data 4-6
Conclusion 4-7
4.2 Evaluation of Cost Estimates as Basis for Setting
Industry-Specific Standards 4-7
Sampling Techniques 4-8
Calculation of Total Cost of Noise Control as a
Multiple of Material Cost 4-8
6
00
c*
-------
Extrapolation Techniques 4-9
Conclusion 4-10
4.3 Costs of Alternative Compliance Scenarios 4-10
Discussion of Compliance Alternatives 4-10
Costs of Alternative Compliance Scenarios on
Industry-by-Industry Basis 4-15
4.4 Costs of Noise Monitoring, Audiometric Testing, and
Provision of Hearing Protectors 4-17
4.5 Assumptions and Limitations 4-19
5. Benefi ts 5-1
5.1 Hearing Conservations 5-1
5.1.1 Measures for Defining Benefit 5-1
The Concept of "Fences" 5~1
Equilibrium vs. Pre-Equi1ibrturn Benefits 5~3
"Stock" and "Flow" Measures of Hearing
Conservation Benefit 5-6
Hearing Impairment Within Different
Hearing Level Categories 5-8
5.1.2 Factors Affecting the Benefit Calculations 5-8
5.1.3 Benefits of Different Compliance Scenarios 5-11
Effect of Standard Compliance Level on
Ultimate Equilibrium Benefits 5-11
Benefits of the Different Compliance Scenarios 5-11
Benefits of Different Compliance Scenarios in
Different Industries 5-16
5.1.4 Assumptions and Limitations of the Calculations 5"l8
5-2 Other Benefits 5"19
5.2.1. Absenteeism Costs Saved 5"19
Noise as a Factor that Influences
Absentee Ism--Data Sources 5"19
Estimates of Reduced Absenteeism Due to Noise 5"21
Methodology 5-21
Calculation Results 5-25
5.2.2 Workers' Compensation Costs Saved 5~32
Potential Workers' Compensation JenefIts 5~32
Estimate of Trends in Current Compensation
Awards 5" 34
-------
Factors which Decrease Estimates of
Compensation Benefits 5"36
Factors which Increase Estimates of
Compensation Benefits 5~38
Alternative Calculations of Costs Saved
for Noise-Induced Hearing Loss 5"39
Other Noise-Related Compensation Costs Saved 5_40
5.2.3 Cardiovascular/Stress Effects 5~4l
5.2.4 Annoyance as a Social Cost 5-42
Note to Section 5 on Discounting Non-Monetary Benefits 5.1,3
6. Cost-Benef i t 6-1
6.1 Cost-Benefit Comparisons Excluding all Benefits
Except Hearing Conservation 6-1
6.2 Approaches to a More Comprehensive Cost-Benefit Analysis 6-3
7. Legal Issues Related to the Workplace Noise Standard 7~1
7.1 The Feasibility Concept and OSHA Regulation 7"1
7.1.1 In the Standard-Setting Context 7"!
7.1.2 In Variance Proceedings 7"2
7.1.3 In Abatement Agreements
7.1.4 In Citation Contests: Continental Can and the
Feasibility of Engineering Controls In Noise
Abatement 7"4
7-2 Industry-Specific Standards 7-6
7-3 Conclusions 7"10
7-4 Ethyl Corporation v. EPA 7"11
8. Policy Issues and a Choice of Compliance Scenarios 8-1
8.1 Recapitulation of Findings 8-1
8.2 Identification of the Issues in Conflict 8-4
8.3 Discussion of the Basic Issues 8-4
The Extent to Which OSHA Should, Under its Mandate,
Impose Costs on Industry and Society in Order to
Benefit Workers 8-4
The Choice of Time Frames for Compliance 8-5
The Mix of Engineering Controls, Administrative
Controls, and Hearing Conservation Programs 8-6
The Desirability of Industry-Specific Standards 8-7
-------
8.1* External Factors Which May Ultimately Bear on a Choice
of Compliance Scenarios 8-7
Tax Alternatives 8-11
EPA Machinery Regulations 8-12
The Desirability of Encouraging Government Inter-
vention Through Support of Industrial Research
and Development 8-12
8.5 The Choice of Compliance Scenarios 8-13
-------
ECONOMIC/SOCIAL IMPACT OF
OCCUPATIONAL NOISE EXPOSURE REGULATIONS*
1. INTRODUCTION
My name is Nicholas^A. Ashford and I am a senior staff member of the
Center for Policy Alternatives at the Massachusetts Institute of Technology.
I have had formal graduate training Tn science, law and economics and am
accompanied today by two of my colleagues at the Center, Dr. Dale Hattis, an
environmental scientist, and Mr. Eric Zolt, a regulatory policy analyst with
a master's degree in business administration and training in law.
While we do not claim to be experts in noise regulation, we are consid-
erably involved with the problems of technology and society, with particular
emphasis on the areas of occupational health and safety, environmental
regulation, and the effects of government intervention on the innovation
process.
We have recently published research relevant to these hearings entitled
Some Considerations In Choosing an Occupational Noise Exposure Regulation. '
This research was also reported in the OSHA hearings last July.**In the
interests of brevity we will make reference to our earlier work wherever
poss ible.
On the basis of the experience outlined briefly above, we hope to be of
assistance in the selection of an appropriate workplace noise exposure stan-
dard by further elucidating both the nature of the social and economic costs
and benefits and alternative bases for decision-making in this troubled area.
We are presently undertaking research on these very subjects for EPA.
However, we are testifying today on our own behalf and not as advocates for
a particular agency's point of view.
*Testimony presented at the DOL-OSHA hearings on the Economic Impact of
Occupational Noise Exposure, September 30, 1976, Washington, D.C.
**Testimony Presented at the DOL-OSHA hearings on the Proposed OSHA Noise
Standard, July 23, 1975, Washington, D.C.
^Some Considerations in Choosing an Occupational Noise Exposure Regulation,
D. Hattis, et. al., EPA 550/9-76-007 (Februrary 1976), hereafter cited as
EPA 550/3-76-007.
1-1
-------
2. THE USEFULNESS OF COST-BENEFIT AND ECONOMIC IMPACT ANALYSES
In difficult economic times, it is expected that a society re-examine
the question of whether the longer-range benefits that are likely to accrue
from environmental/safety regulation are justified by potentially high
shorter-range costs. This is the simplest way to state the problem; It
can also be the most deceptive. There are really three important consider-
ations relevant to the Occupational Safety and Health Administration's
(OSHA) standard-setting function:
The Important distinctions in the justification of government
intervention in occupational or environmental health matters
as compared to economic regulation such as that found in
antitrust or utility regulation.
The limitations of traditional cost-benefit techniques for
making social decisions.
The mandate of the OSHAct.
These issues will be examined In order to view in the proper context
the use of cost-benefit and economic Impact analysis for setting our occu-
pational noise exposure regulation.
The Justification for Government Intervention in Occupational or
Environmental Health Matters
The rationale for government Intervention In the marketplace through
regulation is usually expressed in terms of one of two purposes: either
To Improve the working of the market for goods and services by
encouraging competition, economic efficiency, and the diversity
of available goods and services, or
To ameliorate the adverse consequences of market activities and
technology in general by reducing the attendant social costs.
The underlying reason for pursuing these goals is not to Improve the
efficiency of the market for Its own sake, but to optimize social welfare.
Economic regulation generally addresses Itself to the first purpose by
2-1
-------
2-2
attempting to ensure that the price mechanism operates efficiently to properly
allocate goods and services between economic sectors and between producers and
consumers, but also to properly allocate resources between generations.
Economic regulation, properly carried out, thereby is generally expected to
reduce the price of the goods and services it seeks to regulate, unless the
goods and services were underpriced to begin with. Examples of economic
regulations include antitrust regulation, energy consumption pricing, etc.
Occupational or environmental health regulation, on the other hand,
attempts to internalize the social costs attending market activities -
especially those associated with technology - and it does this by making
sure that the prices of goods and services reflect the true costs to the
consumer. Thus, it might be expected that prices would increase in some
cases to reflect true costs. Including the costs of minimizing adverse
health consequences from technology in the price of goods and services
represents a shift in the way the costs are accounted for and not necessarily
a true increase in the cost to society.
Inflationary impact statements, now required by Presidential directive
for major government undertakings, are of course simply economic Impact
statements and ought to be renamed such. Otherwise, any attempt to Internal-
ize social costs carries with It the onus of being "Inflationary." There
are costs and price rises associated with regulation, but they are not neces-
sarily inflationary.'
11 - the public Interest and the general efficiency of the economic system
would be [better] served to the extent that product prices are a true reflection
of both the private costs (those borne by the manufacturer and the workers)
and social costs (those borne by any "third" parties) of production. Con-
sumption of certain products produced under unhealthy conditions should not
be encouraged by deceptively low prices which Ignore the "human" costs of
production, which are just as real as the actual material production costs
although less tangible and harder to quantify. If the welfare of the public
is to be maximized, the appropriate noise control standard should Impose
added costs on Industry (and indirectly, society) that are equal to the
value society places (and Is willing to pay for) on the need to prevent the
deterioration In worker health and well-being that would otherwise result".
Statement of Allan F. Ferguson, President, Public Interest Economic Center
before the OSHA Public Hearings on Proposed Noise Standards, July 1975, p.3.
-------
2-3
Thus, It can be seen that the two kinds of regulation - economic and
occupational or environmental health - are expected to operate somewhat
differently, because they address different aspects of market activity.
There Is, however, one further critical distinction: occupational or environ-
mental health regulation also has a fundamental purpose, the protection of
certain groups of people - for example, children, workers in an asbestos
plant, or the less educated. This Is Justified under the principle of equity
or fairness, whereby some economic efficiency is said to be sacrificed for
the health or safety of those special groups.
The fact that economic efficiency is sometimes traded for equity con-
siderations should not be disturbing unless it is either unnecessary for the
result or one forgets that economic efficiency Is a measure of mcucvrrCairig
rather than optimizing social welfare. In fact, It should be remembered that
small business Is paid special attention In formulating economic regulatory
strategies - and there Is a conscious tradeoff between economic efficiency
and equity considerations In maintaining the viability of the small firm.
Regulatory policies aimed at fairness to the worker are no less justified.
Having reviewed some of the distinctive Justifications for occupational
or environmental health regulation, the question arises as to the appropriate-
ness of traditional cost-benefit techniques for making social decisions In
this area of regulation.
The Appropriateness of Cost-Benefit Analysis for Making Social Decisions
Economic analysis not only helps to describe many issues In occupational
or environmental health regulation, It also provides tools such as cost-
benefit analysis for helping evaluate the consequences of decisions.
Some of the major problems in using cost-benefit analysis arise because
health and safety benefits are not easily compared to dollar costs. The
market value of human life Is not adequately represented In the traditional
measures of lost wages, awards for pain and suffering, or willingness to
-------
2-k
trade off risk of harm for lower prices In the marketplace. It Is extremely
difficult for one to relate to long-range, low-probability risks of harm or,
to put It another way, it Is difficult to value benefits likely to accrue
in the future, if at all. Further, since the costs and benefits of regulation
occur In different time frames, one is faced with the inevitable difficulty
of applying an appropriate discount rate to Items difficult, if not impossible,
to quantify monetarily in the first place. The situation is further
complicated because often too little is known about adverse health effects
of occupational and environmental hazards; yet decisions, and valuation of
these effects must nonetheless be made.
Often, decision-making has economic efficiency as its only objective.
However, the question of who pays the cost and who reaps the benefit Is
also important. Minimizing nonrandom victimization through a concern for
individual justice is a legitimate social goal which may at times conflict
with attainment of economic efficiency. Society may prefer to move away from
an economically efficient point to have a fairer distribution of costs and
benefits. Of course, different people view what is fair differently - but
this fact makes the consideration of equity no less important. Whatever the
alternative value judgments are as to what is fair, the costs should be known
for those alternatives being considered.
In short, cost-benefit analysis takes no special notice of the fact
that the cost and benefit streams accrue to different elements of society.
To what extent then is cost-benefit useful as a rational basis for action?
Expert consultants, economists or otherwise, have little more to con-
tribute than other citizens to the evaluation of equity effects of occupa-
tional health decisions. Such an evaluation should be made collectively by
an informed public and should be a reflection of the societal values. The
value put on equity consideration In occupational health matters has been
expressed In the OSHAct and Is, In practice, further refined and Interpreted
by the administrative law and Judicial systems.
-------
2-5
What economists can do is specify the equity effects, as well as allo-
cative effects, of regulatory decisions. Despite its limitations and the
methodological problems associated with its use, one might think that cost-
benefit analysis is at least employed in good faith, solely as a technical
aid by decision-makers. In practice, unfortunately, this description is
often not the case. Cost-benefit analysis is often used in an attempt to
convince other parties that a course of action (predetermined on other
grounds) is justified. Value judgments are often hidden in the assumptions
on which the calculation Is based, and balancing costs and benefits without
consideration of equity Is value-laden Itself - It Is a decision to Ignore
equity.
The guidelines for balancing costs and benefits in a particular social
contest are often established by legislation. Economic Impact analyses
then becomes useful primarily in the design of cost-effective means of
fulfilling the mandate of that legislation. We next examine the OSHAct
specifically.
The Mandate of the OSHAct
Because lives and dollars are Incommensurables, there is no theoretically
correct way to balance costs and benefits. The decision Is a political
decision and Congress has given guidance on what the proper OSHA posture
should be in section 6(b)(5) of the OSHAct.
The Secretary, in promulgating standards dealing with toxic
materials or harmful physical agents under this subsection,
shall set the standard which most adequately assures, to the
extent feasiblet on the basis of the beet available evidence,
that no employee will suffer material impairment of health or
functional capacity even if such employee has regular exposure
to the hazard dealth with by such standard for the period of
his working life.
Whether or not OSHA complies with Its mandate depends on the Interpreta-
tion of what "to the extent feasible" Implies in terms of economic and tech-
nological burdens and how many workers are left unprotected. The term
material Impairment can be defined to give a larger or smaller number of
-------
2-6
these unprotected. Finally, the minimum quality of the evidence that OSHA
uses to make its decisions will also determine the kind of standard it will
establish. "To the extent feasible" by ordinary construction would appear
to mean that the workplace is to be made safe as long as the industry is not
incapable of complying. A balancing of costs and benefits is to be done
heavily in favor of worker health, not necessarily with the result that
workplace disease is at an economically efficient level.
Whatever conflicing definitions of hearing impairment have been offered,
there still remains a substantial proportion of workers harmed by either an
85 or a 90 dBA standard, and there are approximately twice as many workers
at risk at 90 dBA than as at 85 dBA. The basic issues are: (1) whether OSHA
should, under its mandate, impose additional costs on -Industry and society,
(2) the time frames for compliance, (3) the mix of engineering, personal
hearing protectors, and administrative controls, and (4) the desirability of
industry-specific standards. It should be emphasized that in Its proposed
standard, OSHA has decided not to use as part of material Impairment the
existing evidence of nonauditory harm - expecially possible implications of
noise for coronary heart disease.
In the setting of other health standards, OSHA has been considerably
more protective of the workers in adopting relatively more stringent standards.
Further, the courts have upheld the OSHA protective posture aa legislatively
determined. In a D.C. Circuit case challenging the asbestos standard^,
Judge McGowan stated, In commending on the standard of review:
there are areas where explicit factual findings are not possible,
and the act of decision is essentially a prediction based
upon pure legislative judgment, as when a Congressman decides
to vote for or against a particular bill. Furthermore, policy
choices of this sort are not susceptible to the same type of
verification or refutation by reference to the record as are some
factual questions. Consequently, the court's approach must neces-
sarily be different no matter how the standards of review are
label led.
^Industrial Union Department. AFL-CIO v. Hodgson. 499 F. 2d. 467 (D.C. Clr. 1974).
-------
2-7
In a Second Circuit case challenging the vinyl chloride standard ,
former Supreme Court Justice Clark stated, in commenting on the asbestos
case approach, "The problems involved in according judicial review in such
circumstances have been wisely discussed by Judge McGowan." In commenting
on plaintiff's contention that the available scientific evidence does not
support the 1-ppm standard, Justice Clark stated:
We find, however, that the evidence is quite sufficient to
warrant the Secretary's choice. First, it must be remembered
that we are dealing here with human lives... Moreover the
animal exposure study ... identified fatal liver angiosarcoma
and other kidney and liver diseases at the 50 ppm level.
As in the IUD [asbestos] case, the ultimate facts here in
dispute are on the frontiers of scientific knowledge, and
though the factual finger points, it does not conclude.
Under the command of OSHA, it remains the duty of the
Secretary to act to protect the working man, and to act
even in circumstances where existing methodology or research
is deficient. The Secretary, in extrapolating the MCA
[Manufacturing Chemists' Association] study's findings
from mouse to man, has chosen to reduce the permissible level
to the lower detectable one. We find no error in this respect.
OSHA may wish to distinguish the noise standard from the standards for
asbestos or vinyl chloride, because in the latter cases, life and death
issues are involved. However, (]) the OSHAct does not speak in terms of
life and death issues and (2) if OSHA gives any acknowledgment of noise
as a general stressor and a cocausitive factor in coronary heart disease
and other diseases, life and death issues are involved.
The OSHA Inflationary Impact Statement
The BBN report forms the basis of OSHA's economic impact assessment.
Having set out the inherent limitations in assessments of this kind, we
next procede to evaluate the cost and benefit basis for establishment of an
occupational noise exposure regulation. If a cost-benefit approach is to
be used, it at least ought to be used with parallel treatment of benefits
and costs.
^The Society of the Plastics Industry. Inc. v. OSHA}509 F. 2d 1301 (2nd Cir. 1975),
-------
3. SUMMARY OF FINDINGS
3.1 Usefulness of Cost-Benefit and Economic Impact Analysis
Cost/benefit analysis, as usually performed, has important limitations
for use in clarifying environmental/health policy choices:
-- Costs and benefits are generally in different units (dollars, lives,
person-years of hearing impairment), occur in different time frames,
and accrue to different groups of people. Comparisons of cost and
benefit which ignore these aspects of incommesurabi1ity between
costs and benefits can conceal important value choices which are
properly the province of social policy decisions, not objective
analysi s.
Both cost and benefit estimates generally have considerable uncer-
tainty which may not be fully conveyed in executive summary state-
ments of results.
Given the mandate of the OSHAct, that the Secretary must set the
standard "which, to the extent feasible...ensures that no worker wi11
suffer material impairment...." and the fact that an 85 dBA standard
will protect significantly more workers than a 90 dBA standard, the
choice of standard level must be determined by the issue of feasibility.
Different time-phasing for compliance may be used in different industries,
however, in recognition of the different capabilities of specific
industries to comply quickly and to prevent inordinately high costs
for the benefits received.
If cost/benefit analysis is to be performed for the latter purpose
(time-phasing), it must be performed using parallel treatment of costs
and benefits, with a minimum of other methodological flaws. The purpose
of our written testimony is to illustrate proper analytical techniques
with exemplary calculations, and explore the policy implications of the
results of those calculations.
3-1
-------
3-2
3.2 Cos ts
Methodological Conclusions
Although there are uncertainties in the underlying data and there
are major methodological flaws in the BBN cost analysis, we believe
that we have demonstrated that a proper methodological treatment
yields (after-tax effects) costs of the same magnitude. Furthermore,
we believe that the BBN estimates do provide a rational basis for the
adoption of an occupational noise exposure regulation.
For compliance periods of more than one year, the cost of noise
reduction must be discounted to its present value.
The annual maintenance charge of 5% of capital cost must be
included in the calculation of total compliance costs.
The after-tax cost of compliance should be considered in deter-
mining the effective cost of noise reduction equipment to
industry.
An analysis of the compliance costs on an industry-by-industry basis
tends to suggest a potential wide variation among industries in the
economic burden to comply with a 90 dBA or an 85 dBA standard. This
variation could form part of the basis for meaningful distinctions
among industries in selecting different compliance scenarios. However,
in order to provide a rational basis for setting an industry-by-industry
standard (should that be desired) the BBN cost estimates need to be
confirmed and adjusted, where necessary.
Results
The magnitude of the effect that discounting has on compliance
costs and the practical considerations making immediate compli-
ance not feasible, suggest the consideration of alternative
compliance scenarios with different time-phasing for compliance.
-------
3-3
The effect of including the costs of noise monitoring, audiometric
testing, and hearing protectors is to increase the cost of comply-
ing with a 90 dBA standard relative to an 85 dBA standard.
The effect of extending the compliance period by 5 years, 10 years,
and 15 years will be to reduce the effective cost of noise control
equipment by about 25%, and 60%, respectively.
The effect of the inclusion of the maintenance cost in the cost
calculation is to increase the BBN compliance cost estimates by
over 50%.
It is likely that about half of the net costs of the regulation on
industry will be borne indirectly by governments in the form of
tax reductions.
-------
3-4
There exists a potentially wide variation among industries in the
economic burden to comply with a 90 dBA and an 85 dBA standard.
3-3 Benefits
Methodological Conclusions
Because noise-induced hearing loss is a change from one continuous
population distribution of hearing levels to another, it is not
possible to gain a valid appreciation of hearing conservation
benefits by simply calculating the numbers of people crossing a
given "fence" of hearing levels. It is essential to use a series
of fences and determine the numbers of individuals falling between
the fences for specific periods of time under different regulatory
options. For our computations, we determine benefits for three
hearing level ranges: 20-25 dB, 25-50 dB, and over 50 dB (hearing
levels averaged at .5, 1, and 2 KHz).
Because each individual's hearing loss reflects noise exposure
experienced over his/her entire previous work history, the ultimate
equilibrium level of hearing conservation benefits will not be
experienced until more than forty years after compliance with any
noise control regulation, when complete replacement of the work-
force will have taken place. It is therefore essential to express
hearing conservation both in terms of the ultimate equilibrium flow
of benefits (reduction in number of workers in different hearing
level ranges at any one time) and in terms of the stock of benefits
realized prior to equilibrium (reduction in the person-years of
impairment in different hearing level ranges from the time of com-
pliance to forty years thereafter).
The BBN estimate of noise exposure in individual industries must
be regarded as highly preliminary and subject to error. Properly
interpreted, however, they can: (1) form the basis for assessments
of the overal1 hearing conservation benefits likely to be produced
-------
3-5
by compliance with different noise regulations under different
assumptions, and (2) give some indication of how much the hearing
conservation benefits of noise control may vary among industries.
The data for specific industries need to be critically assessed,
however.
Results
Ultimate Equilibrium Flow of Benefits
If present exposures remain unchanged, approximately 1.9 million
workers will experience hearing levels above 25 dB due to indus-
trial noise at any one time (after subtraction of the workers who
will be over 25 dB due to presbycusis alone). The implementation
of a 90 dBA standard will reduce the number over 25 dB by about
770,000 and the implementation of an 85 dBA standard will reduce
the number over 25 dB by about 1,350,000.
Of this hearing impairment over 25 dB which is prevented, approxi-
mately 15% represents hearing impairment in the "severe" over 50 dB
category. In addition, the number of people prevented from experi-
encing 20-25 dB hearing levels is approximately one-third as large
as the number of people prevented from experiencing hearing levels
over 25 dB.
Pre-Equilibrium Benefits of Different Compliance Scenarios
Compliance with a 90 dBA standard within five years will prevent
about 18 million person-years of impairment over 25 dB prior to
equilibrium (at year k$). Compliance with an 85 dBA standard
within five years will prevent about 30 million person-years of
impairment over 25 dB in the same time period. A two-step com-
pliance scenario with compliance to 90 dBA within five years and
compliance to 85 dBA within ten years will prevent about 28 million
person-years of impairment over 25 dB prior to equilibrium.
-------
3-6
Worker Mobi1i ty
Worker mobility is a crucial determinant of the size of the hearing
conservation benefits anticipated to result from regulation of
noise levels. Higher levels of mobility substantially increase the
impairment produced in the population by any given job, and the
benefits of noise control. Different mobility assumptions can lead
to benefit estimates differing by several fold.
Worker's Compensation
The total potential savings in worker's compensation benefits that
will accrue from either a 90 or 85 dBA standard are small ($.28
billion and $.53 billion, respectively) when compared to the capital
and maintenance costs of compliance. It is clear that the savings
from the worker's compensation payments alone cannot serve as an
adequate economic incentive for industries to voluntarily reduce
the level of noise exposure in the workplace.
Absentee!* sm
The benefits of prevented absenteeism are substantial. For the
90 dBA standard with a five-year delay, the expected benefits are
$3-9 billion and for 85 dBA, $6.3 billion.
Other Benefits (reduction in cardiovascular disease processes,
and in annoyance) are plausible and, though of uncertain magnitude,
must be included in any complete assessment of benefits.
3-k Cost/Benefi t
Cost/benefit comparisons excluding all benefits except pre-
equilibrium hearing conservation indicate that:
-- Cost/effectiveness for hearing conservation of the noise control
expenditures to reach 85 dBA in five years is similar to the
cost/effectiveness of the noise control expenditures needed to
-------
3-7
reach 90 dBA in five years. For the 85 dBA regulation, $8^0
present value would be spent to prevent each person-year of
impairment over 25 dB, and for the 90 dBA regulation $790
would be spent for each person-year over 25 dB prevented.
The "two-step" scenario (compliance with 90 dBA in five years,
compliance with 85 dBA within ten years) has a slightly better
cost/benefit ratio ($760/person-year over 25 dB prevented) than
the other scenarios.
-- The data tend to suggest wide variation in the cost/benefit
ratios for the different compliance scenarios in different
industries.
Inclusion of absenteeism benefits, tax benefits, worker's compen-
sation and other non-auditory benefits, all move the cost/benefit
ratio in the direction of providing more benefits to workers at
lower costs to firms.
3-5 The Choice of Compliance Scenarios
The form of the standard must reflect not only the best available
technological and scientific information, but must also consider the admini-
strative burdens of setting the standard and enforcing the law. In Section 7
we raised important issues likely to surface in legal challenges to whatever
standard is promulgated and enforced. The challenges may differ as to tech-
nological versus economic feasibility, who proves something as opposed to
what needs to be proved; and whether the challenge is to a broad-based
standard, an industry-specific standard, or to the particular burden placed
on an individual firm.
The facts would appear to mandate an ultimate compliance with an 85 dBA
standard in all industries.
Considerations of both costs and realiability support the preference of
engineering controls as the primary compliance strategy, supplemented by
-------
3-8
personal hearing protectors and some administrative controls (such as the
running of night or weekend shifts) in the interim phase of compliance.
Some industries may be harder hit. Government policies favoring further
cost-sharing by society through tax changes and government participation
in research and development should be considered if engineering controls
impose a particularly severe burden on a substantial number of industries.
A slight delay in compliance time (less than five years) is probably
inevitable. If a longer delay is deemed desirable, the standard ought to
require compliance with an 85 dBA standard in no longer than 10 years,
with an interim compliance with 90 dBA at no later than five years.
There are differences between industries in the economic burden likely
to be imposed. The factors which can be used to differentiate industries
in order to promulgate industry-specific standards, which differ in com-
pliance times, in certain cases are:
cost/benefit ratio
cost per measure of industry profitability
the likelihood of a technological breakthrough
the existence of government assistance
the likely effectiveness of proposed machinery regulations
OSHA enforcement priorities vis-a-vis industries, and
OSHA abatement and variance posture.
In sum, we believe that there is sufficient evidence in the record to
justify setting an occupational noise exposure regulation. It would not be
beneficial to wait until more evidence is required. The form of the standard
must be such that the regulation is enforceable and likely to elicit an
effective response by those regulated. The regulation must be of the form
that can be effectively administered. The damage resulting from further
delay in the setting of a standard is substantial and warrants prompt and
deliberate action.
-------
If. COSTS
This section will evaluate the capital and maintenance cost of com-
pliance of the proposed noise control regulations. A discussion of the
effects of a decrease in the noise level on absenteeism is included in section
5.2.1 of the Benefits section. However, it is important to realize that
the savings from lower absenteeism could also be properly treated as a
reduction in the gross capital and maintenance costs of noise control
equipment. Finally, the reader is cautioned to note the final section
on the assumptions and limitations of the calculation and data presented below.
4.1 Evaluation of the Cost Estimates in the Aggregate
While the Inflationary Impact Statement Is the most complete analysis
of the noise level exposure and the costs of reducing the noise In the
workplace to date, several factors must be considered In order to deter-
mine the usefulness and accuracy of the cost estimates. We conclude that
although many criticisms of the treatment of the aggregate data are justified
and certainly merit further discussion, the result of the proper treatment of
the initial cost data yields approximately the same afteitax cost estimates.
Listed below in summary fashion are the methodological flaws present
in the cost estimates Included In the Inflationary Impact Statement.
Failure to Discount Captial and Maintenance Expenditures Over Proposed
Compliance Periods.
Because capital expenditures usually Involve major outlays over long
periods of time, proper decision-making requires the consideration of the
time-value of money. Discounting Is the process of converting future pay-
ments of money Into the present value of those payments. Figure ^-1 Is a
graphic view of the relationship between present value Interest factors,
interest rates and time.
4-1
-------
k-2
FIGURE if.]
Relationship between present value interest factors, Interest rates, and tint*
The Inflationary Impact Statement treated the compliance costs as If
all expenditures are made in the same time period as the standard Is promu-
lgated. The only allowance for cost reduction over time Is the 3% per year
estimated by considering both the firm's opportunity to replace noisy equip-
ment through normal capital replacement and the cost decreases from techno-
logical change in the production and Installation of noise control equipment.
If the policy maker is considering compliance periods of more than one
year, then the costs of noise reduction must be discounted to its present
value. The magnitude of the effect of discounting is demonstrated by the
fact that a dollar spent on noise control equipment fifteen years from now
Is equivalent to 36< spent on noise control equipment today (for discount
rate at 7$).
Table 4.1 is a summary of the discounted present value of BBN compliance
cost estimates for different compliance alternatives. Although the table
will be discussed in further detail later, It Is useful to look at the dis-
counted capital cost column in the first 20 year time frame. Note that the
immediate compliance costs of an 85 dBA and 90 dBA regulation are the BBN
-------
TABLE 4.1
DISCOUNTED PRESENT VALUE OF BBN COMPLIANCE
COSTS ESTIMATES* (BEFORE TAX EFFECTS)
DOLLARS IN MILLIONS
1st 20-Year Time Frame
2nd 25-Year Time Frame
Discounted
Di scounted
Total 1st
Discounted
Capital Cost^
Discounted
Total 2nd
Total
Compliance Alternative
Capital Cost
Maintenance Cost2
20 Years
Maintenance Cost
25 Years
45 Years
A. Immediate Compliance 85 dBA85 (0 yr.)
18,540
9821
28,361
1913
1106
3019
31,380
B. Immediate Compliance 90 dBA90 (0 yr.)
10,545
5586
16,131
1088
629
1717
17,848
C. 5 yr. Compliance 85 dBA85 (5 yr.)
14,268
7775
22,043
1913
1106
3019
25,062
D. 5 yr. Compliance 90 dBA90 (5 yr.)
8,115
4408
12,524
1088
629
1717
14,241
E. 10 yr. Compliance 85 dBA85 (10 yr.)
10,576
5724
16,300
1913
1106
3019
19,319
F. 5 yr. Compliance 90 dBA; within 10 yr.
Compliance 85 dBA90 (5 yr.);85 (10 yr.)
11,789
6366
18,154
1913
1106
3019
21,173
G. 5 yr. Compliance 90 dBA; within 15 yr.
Compliance 85 dBA90 (5 yr.);85 (15 yr.)'
10,784
5757
16,541
1913
1106
3019
19,560
H. 15 yr. Compliance 85 dBA85 (15 yr.)
7,754
4105
11,859
1913
1106
3019
14,878
~Assuming:
34 per year cost reduction for noise control equipment
discounted at rate of 7t
inclusion of maintenance charges of noise control treatments
45 year time frame analysis
'Assuming cost to go from 90 dBA to 85 dBA levels is equal to the incre-
mental compliance costs ($7995) provided by BBN.
2Maintenance charges are equal to 5% of capital cost charges.
3
Cap!tal
Costs
Adjustment for Cost
Reduction for Techno-
logical Change S Inclu-
sion of Noise Control
in Machine Design
PV @ 7% For
20 Years
To Reach
85 dBA:
18,540
x .40 x
.258
- $
1,913
To Reach
90 dBA:
10,540
x .40 x
.258
- $
1,088
Maintenance Costs:
5% of Capital Cost
PV of Annuity
25 Years ง 7%
PV 8 7% For
20 Years
85 dBA370.8
x 11.564 x
.258
- $
1,106
90 dBA210.8
x 11.564 x
.258
- $
629
-C-
w
-------
k-k
cost estimates of $18.5 billion and $10.5 billion, respectively. The
effect of extending the compliance period by 5 years (compliance alter-
natives C, D), 10 years (compliance alternative E), and 15 years (compli-
ance alternative H), will reduce the effective cost of noise control equip-
ment by about 25%, 40% and 60% respectively.
Maintenance Costs
Although the Inflationary Impact Statement provided an estimate of
maintenance costs as 5% of capital costs, the statement failed to impress
upon the reader the magnitude of these annual charges. If the Immediate
compliance cost for an 85 dBA standard is $18.5 billion, then the maintenance
charge Is $927 million per year for the 20-year life of the equipment. Note:
this annual stream of maintenance costs must also be discounted to its present
value. (Discounted maintenance cost ฆ $9.8 billion.)
Referlng again to Table 4.1, the discounted maintenance cost column In
the first 20-year time frame is the summary of the present value of an annual
charge for 20 years computed for each compliance alternative (for discount
rate at 7$). The effect of the inclusion of the maintenance cost in the cost
calculation is to increase the BBN compliance cost estimates by over 50$.
(See column titled "Total first 20 years".)
45-Year Time Frame Analysis
In order to construct a more appropriate frame of comparison of the cost
of noise control with the benefit of reduced hearing impairment, we have ex-
tended the cost time frame analysis from 20 years to 45 years. This is the
time period needed for the hearing impairment benefits to reach full equilibrium
levels. (See section 5- on Benefits.)
The costs for the second 25-year time frame are our best guesses at
what the capital and maintenance charges will be after the original noise
reduction equipment has completely worn out. Calculation of the capital
cost were made by first taking BBN estimate of capital cost requirement
to reach the proposed standard, adjusting the capital cost for cost reduc-
tions stemming from technological change and inclusion of noise control in
-------
k-5
machine design, and discounting the costs to the present value.* The
effect of expanding the time frame from 20 years to 45 years will result
in an increase of about 10% over the total for the first 20 years. (Compare
columns 6 and 3.) The relatively small size of this increase is due to the
fact that (1) the cost will not be incurred for at least 20 years and (2) an
increased tendency away from expensive retrofit technique of noise control.
The After Tax Cost of Compliance
We have not undertaken a detailed study of the tax implications of the
increases in capital expenditures and increases in maintenance costs to be
produced by the installation of noise reduction equipment. In general,
however, we can say that it is likely that about half of the net costs of
the regulation on industry will be borne indirectly by governments in the
form of tax reductions.
Capital expenditures for noise control offer the opportunity for a
depreciation deduction as property used in trade or business, ง167 Internal
Revenue Code. In addition, the almost certain continuation of the 10%
investment tax credit will further reduce the after-tax cost of the noise
regulation to the industry. With a current corporate federal tax rate of k8%,
additional state corporate income tax in some states, and the several percent
of additional benefit due to the tax credit, about half of the prevailing
dollar capital cost will be recouped by the industry.
Expenditures for maintenance costs will be deducted as an operating
expense in the calculation of the firm's net taxable income. The effec-
tive after-tax cost of maintenance changes will therefore be about one-
half the before tax cost.
The above discussion assumes that the firm undertaking the capital
and maintenance expenditures operates at a profit and does in fact pay taxes.
To the extent that portions of an industry do not operate profitably
and absent any tax-carryback or carry-forward opportunities, the possibility
of "government participation" In the costs of noise control will be reduced.
*See Table k. 1., footnotes 3 and 4 for a presentation of the calculation of
capital and maintenance cost for the second 25-year time frame analysis.
-------
k-6
Uncertainties in the Underlying Data
The following criticisms of a former set of BBN cost estimates were pre-
sented at the public hearings on the proposed noise standard, July, 1975 and
will certainly be raised again at these hearings:
the sample plants analyzed by BBN are not representative of each
i ndustry.
the resulting industry-wide extrapolation of compliance cost for
the sample firm significantly overestimates/underestimates the
"true" cost of compliance.
BBN failed to consider alternatives to noise control other
than retrofit. Since retrofit is a high cost noise control procedure,
failure to consider least-cost methods biases the cost estimates
upward.
BBN estimate of 3% per year cost reduction for noise control equip-
ment, resulting from the firm's opportunity to introduce quieter
equipment through normal capital replacement and cost decreases from
technological change in the production and installation of noise
control equipment, is too conservative because it largely ignores
economies of scale and recognized "learning curves".
BBN failed to consider the costs of "down-time" during the installa-
tion and maintenance of noise control equipment and decreases in
labor and capital productivity as a result of add-on noise control
eq u i pmen t.
BBN failed to consider increases in productivity resulting from a
quieter work environment and the catalyst effect of noise regulation
on the introduction of new and more efficient machines.
While we find merit in the criticisms expressed above, we have chosen not to
attempt to quantify the effects of those criticisms in this report.
It is crucial to remember that the purpose of the BBN report was to
estimate the aggregate cost of compliance with the proposed regulation. The
sample of 68 firms in 19 SIC codes was to be utilized as the basis for a
-------
k-7
ballpark figure of total costs not as an Industry-by-industry estimate of
compliance costs. Once this point is. fully comprehended, most of the above
criticism is not relevant to the ultimate decision -- whether the aggregate
cost, when compared to the benefits, justified the promulgation of a lower
standard.
The point estimate of the aggregate total would probably change signifi
cantly if all the criticized factors were properly analyzed and computed.
However, if the upward and downward biases in the data tend to be offsetting,
and the magnitude of the benefits justify even a "high" cost estimate, then
the decision-maker need only make a rough cut analysis on the disputed
factors as the penultimate calculation in the cost-benefit analysis.
Conclusion
In sum, although there are uncertainties in the underlying data and
there are major methodological flaws in the BBN cost analysis, we believe
that we have demonstrated that a proper methodological treatment yields
(after tax effects) costs of the same magnitude. Furthermore, we believe
that the BBN estimates do provide a rational basis for the adoption of an
occupational noise exposure regulation.
4.2 Evaluation of Cost Estimates as Basis for Setting Industry-Specific
Standards
As discussed earlier, the purpose of the BBN study was to estimate the
aggregate cost of noise control and not to estimate compliance cost on an
industry-specific basis. The authors of the study will readily admit that
the cost estimates are not meaningful at a two-digit level. Discussed below
are several factors which limit the usefulness of the cost estimates as an
aid in setting industry-specific standards.
-------
4-8
Sampling Techniques
Conversations with BBN personnel revealed that between 45*55 of the
firms in the sample of 68 firms were included because BBN had been recently
retained by those firms for noise control projects. While the inclusion of
those firms enabled BBN to construct a larger sample than would otherwise
be possible given the time and money constraints, the type of firm that
would retain BBN is not necessarily representative of the industry. Logi-
cally, one could assume that the retaining firm would tend to be noisier
(Why else would it expend resources on noise control?) and perhaps more
profitable (BBN reputation as high quality-high cost noise consultants) than
the typical firm in the industry.
Not surprisingly, other analysts have examined the sample firms chosen
and concluded that they are not representative of the industry . The legal
requirement for setting different compliance periods for different industries
is that meaningful distinctions must exist among industries. It is clear
that additional information about firms in an industry should be examined
to determine how representative of the industry the sample is.
Calculation of Total Cost of Noise Control as a Multiple of Material Cost
In calculating the cost of noise control for each sample plant, BBN
first determined the total cost for acoustical material required to quiet the
workplace, and then multiplied that total by six. This 6 multiplier repre-
sents an average across all types of noise control of the ratio of total
cost to material cost. BBN has further indicated that the range of the
multiplier of different types of noise reduction equipment is from 2 to 10.
Vor criticisms of the sample used in the first BBN report see the statement
of Ruth Ruttenberg, economist, on behalf of AFL-CIO before the OSHA Public
Hearings on Proposed Noise Standards, July 1975, p. 4-5: Analysis of
representativeness of sample firm In SIC 20, 28, 29, 30; and;
statement of Allan R. Ferguson, President of Public Interest Economic Center
before the OSHA Public Hearings on Proposed Noise Standards, July 1975,
p. 16-23: Analysis of representativeness of sample firms In SIC 20, 22, 24,
25, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 49.
-------
4-9
Therefore, the cost estimates on a two-digit level could possibly be over-
estimated by a factor of 3 or underestimated by a factor of 1.7 due to this
imperfection alone.
Extrapolation Techniques
The Inflationary Impact Statement utilized capital cost per worker in
the firm as the metric In estimating the total capital cost of compliance
with the proposed noise standard. By focusing on the number of workers in
the firm as a multiplier rather than physical equipment, the statement
Ignores differences in operating and production processes between firms within
an industry.
This extrapolation technique would produce different costs for quieting
the same machinery in cases where the size of the work crew or the number of
operating shifts varies.' A better method of extrapolation would focus on
2
the number and type of machinery. A recently completed report by BBN
catalogues by two-digit SIC codes the machinery and the noise control options
avallable.
The suggestion of a machinery census approach Is a reversion to the
3
technique followed In an earlier BBN report . It is important to note a
major modification in the approach to cost calculation adopted by BBN since
the issuance of that report. Proper noise control reduction requires quieting
only those machines to which workers are exposed, and only to the extent
necessary to limit the workers' exposures above a desired level. Therefore,
a better estimate of the total capital compliance cost for a specific Industry
can be computed by estimating the cost of noise control options available
and determining the number and type of machines to which workers are exposed.
'Arthur D. Little, Evaluation of the OSHA Noise Control
Costs Developed by""5BN and API. Cambridge. Massachusetts. (Working Paper).
^Report No. 3353, D. 0. L. Draft Report, The Technical Feaslbl11ty of Noise
Control in Industry.
3
Bolt, Beranek, and Newman Report No. 2671, Impact of Noise Control at the
Workplace, Cambridge, Massachusetts.
-------
Conclusion
An analysis of the compliance costs on an industry by industry basis
tends to suggest a potential wide variation among industries in the economic
burden to comply with a 90 dBA and 85 dBA standard. This variation could
form part of the basis for meaningful distinctions among industries in
selecting different compliance scenarios. However, in order to provide a
rational basis for setting an industry-by-Industry standard (should that be
desired) the BBN cost estimates need to be confirmed and adjusted, where
necessary.
4. 3 Costs of Alternative Compliance Scenarios
This section will discuss the effect of extending the compliance period
on the cost of noise control to the firm. Reference will be made to Table 4.1
which presents compliance alternatives and the corresponding discounted costs.
Discussion of Compliance Alternatives
The magnitude of the effect that discounting has on compliance costs and
the practical considerations making immediate compliance not feasible, requires
the consideration of alternative compliance scenarios. Figures 4.2 A-H are a
graphic presentation of the compliance scenarios included in Table 4.1.
Scenarios A and B represent immediate compliance with an 85 dBA and
90 dBA standard. The capital costs for the first 20-year time frame are the
BBN estimates of $18.5 and $10.5 billion. To these figures were added the
discounted maintenance costs and the 2nd 25-year time frame costs to arrive
at the totals listed in Figures 4.2 A and B.
Scenarios C and D represent a 5 year compliance period for the 85 dBA
and 90 dBA standard. The investment schedule is from the BBN estimates of
the distribution of noise control capital costs over different compliance
periods.' The effect of extending the compliance period by 5 years reduces
'BBN Report No. 3246, Economic impact Analysis of Proposed Noise Control
Regulation, Figure 3-1, P- 3"35-
-------
4-11
the cost of the 85 dBA regulation by $6.3 billion and reduces the cost of the
90 dBA regulation by $3.6 billion. (Compare Figures 4.2 A and B with
Figures 4.2 C and D.)
Scenario E represents a 10 year compliance period for the 85 dBA standard.
The effect of extending the compliance period to 10 years reduces the cost of
an 85 dBA standard from the immediate compliance cost of $31.8 billion to
$19.3 billion.
Scenarios F and G are hybrid compliance schedules. The first part of
each scenario is compliance with the 90 dBA standard within 5 years. The
second part is a subsequent reduction to the 85 dBA level in an additional
5 and 10 years. Note: the assumption that the cost to go from 90 dBA to
85 dBA levels is equal to the incremental compliance costs ($8.8 billion)
provided by BBN. We considered the possibility that incremental cost may
underestimate the costs of the second step. However, it is logical to assume
that in those situations where it is cheaper to reduce the noise level to
lower standard in one step, the rational industrialist will choose to comply
with the 85 dBA standard, even though the standard may allow a two-step
approach to the lower standard.
Finally, scenario H represents a 15 year compliance period for the 85
dBA standard. The effect of extending the compliance period to 15 years will
further reduce the before-tax costs of an 85 dBA standard from the immediate
compliance cost of $31.8 billion to $14.9 billion.
The final two graphs on Figure 4.3 represent all the compliance alter-
natives for which costs were computed. The graph on the left is significant
because it highlights the 4 compliance scenarios for which detailed benefits
calculations were made.
-------
4-12
COMPLIANCE SCENARIOS
Compliance
Labels
Compliance
Levels
_ Proaont
Exnns.nrv
B (f 17.8)
10
IS
Years
Years
Compliance
Lei/els
Compliance
Levels
_ Present
Exf>psiire
Distribution
90
dBA
85
dBA
C\
025.1) N
^Present
Exposure
Distribution
90
dBA
85
dBA
10
15
Years
D
((M.2)
10
15
Years
Discounted Present Value of BBN Compliance
Cost Estimates (Capital and Maintenance Charges)
Before Tax Effects
(in billions of dollars)
FIGURES 4.2 A, B, C, AND D
-------
k-13
COMPLIANCE SCENARIOS
Compliance
Levels
Present
Exposure
Distribution
90
dBA
85
dBA
J(f19.3)
10
Compliance
Lewis
_ Present
Exposure
Distribution
90
dBA
85
dBA
15
F ง212)
10
15
Years
Years
Compliance
Levels
Present
Exposure
Distribution
90
dBA
85
dBA
Years
G
ft 19.6)
10
Compliance
Levels
Present
Exposure
Distribution
15
90
dBA
85
dBA
<{14.9!
10
IS
Years
Discounted Present Value of BBN Compliance
Cost Estimates (Capital and Maintenance Charges)
Before Tax Effects
(in billions of dollars)
FIGURES 4.2 E, F, G, AND H
-------
4-14
COMPLIANCE SCENARIOS
Compliance Compliance
Levels Levels
Compliance Alternative
Cost
A.
Immediate Compliance 85 dBA85 (0 yr.)
$
31.4
B.
Immediate Compliance 90 dBA90 (0 yr.)
$
17.8
C.
5 yr. Compliance 85 dBA--85 (5 yr.)
$ 25.1
D.
5 yr. Compliance 90 dBA90 (5 yr.)
$
14.2
E.
10 yr. Compliance 85 dBA85 (10 yr.)
$
19.3
F.
5 yr. Compliance 90 dBA; within 10 yr.
Compliance 85 dBA--90 (5 yr.);85 (10 yr.)
$
21.2
G.
5 yr. Compliance 90 dBA; within 15 yr.
Compliance 85 dBA90 (5 yr.);85 (15 yr.)'
$
19-6
H.
15 yr. Compliance 85 dBA85 (15 yr.)
$
14.9
Discounted Present Value of BBN Compliance
Cost Estimates (Capital and Maintenance Charges)
Before Tax Effects
(in billions of dollars)
FIGURE 4.3
-------
iป-15
Costs of Alternative Compliance Scenarios Industry-By-Industry Basis
The methodology for calculating the costs of alternative compliance
scenarios for the aggregate compliance costs is similarly applicable for
determining the costs of the scenarios on an industry-by-industry basis.
Table 4.2 presents the costs of different compliance scenarios for each
of the 19 SIC codes.
The reader is cautioned that Table 4.2 is included to show the
potential wide variation among industries in the economic burden to
comply with 90 dBA and 85 dBA standard. As discussed earlier, (see
Section k.2), there exists possible limitations in the usefulness of
the BBN cost estimates as a base for setting industry-specific standards.
A comparison of the costs and benefits of alternative compliance
scenarios on an industry-by-industry basis will be presented in a
discussion of cost/benefit. (See Section 6).
-------
TABLE k.2
TOTAL DISCOUNTED COMPLIANCE COSTS* OVER 1*5 YEARS
Costs of Different Compliance Scenarios
Compliance Scenario**
0
D
F
C
SIC
INDUSTRY Present
90 (5vr)
90 (5yr)
85 (10yr)
85 (5vr)
20
Food and Kindred Products
0
777
1,730
2,264
21
Tobacco Manufacturers
0
61
113
142
22
Textile Hill Products
0
1,560
2,700
3,339
23
Apparel e Other Textile Products
0
0
13
20
24
Lumber and Wood Products
0
945
1,327
1,541
25
Furniture and Fixtures
0
480
560
602
26
Paper and Allied Products
0
270
365
419
27
Printing and Publishing
0
635
1,224
1,555
28
Chemicals and Allied Products
0
412
689
845
29
Petroleum and Coal Products
0
236
310
351
30
Rubber and Plastic Products
0
155
268
331
31
Leather and Leather Products
0
0
9
14
32
Stone, Clay 6 Glass Products
0
230
416
520
33
Primary Metal Industries
0
1,884
3,211
3,954
34
ฆ Fabricated Metal Products
0
1,762
1,983
2,109
35
Machinery, except Electrical
0
2,951
3,501
3,812
36
Electrical Equipment & Supplies
0
196
391
500
37
Transportation Equipment
0
905
1,234
1,419
49
Electric, Gas t Sanitary Services
0
777
1,128
1,325
ALL INDUSTRY TOTAL
0
14,241
21,173
25,062
*
Based on BBN Data
**
See Figure A.3 for a graphical representation of the lettered compliance scenarios
-t-
i
ON
-------
iป-17
k.A Costs of Noise Monitoring, Audiometric Testing, and Provision of
Hearing Protectors
Heretofore the compliance cost calculation included only the capital
and maintenance charges required to comply with the proposed regulation.
This section will discuss the costs of other facets of regulation: cost
of noise monitoring, cost of audiometric testing, and cost of provision
of hearing protectors.
Table shows the discounted present value cost of compliance with
a regulation that requires noise monitoring and audiometric testing for
those workers exposed to sound levels greater than 85 dBA. The cost was
calculated by multiplying the BBN cost per worker estimate for noise
monitoring ($12 per person)' and audiometric testing ($20 per person)' by
the total number of production workers and the number of workers exposed
to sound levels greater than 85 dBA, respectively. This figure, which
represents the cost per year of compliance, was then discounted at a rate
of 7% over 5, 10, 20, and hO years.
The cost of providing hearing protectors was calculated by multiplying
2
the BBN cost/per worker estimate ($10 per person) by the number of produc-
tion workers exposed to sound levels greater.than 85 dBA. This total was
then discounted in the same manner described above.
It is important to note the compliance costs of noise monitoring,
audiometric testing, and hearing protectors vary with alternative compliance
scenarios. A compliance scenario which requires engineering controls to
85 dBA would not require expenditures for audiometric testing and hearing
protectors. A scenario with a 90 dBA compliance level, however, would
require expenditures for audiometric testing and hearing protectors (if
required by regulation) in addition to the capital and maintenance compliance
charges. Thus, the effect of including the costs of noise monitoring, audio-
metric testing and hearing protectors is to increase the cost of complying
with a 90 dBA standard relative to an 85 dBA standard. -In other words,
' BBN Report Mo. 32A6, Economic Impact Analysis of Proposed Noise Control
Regulation, p.3-1.
2lbld., p.3-33.
-------
iป-18
TABLE 4.3
DISCOUNTED PRESENT VALUE OF COSTS OF NOISE
MONITORING, AUDIOMETRY TESTING AND HEARING PROTECTORS*
Dollars in Mill ions
Cost
1 year
5 years
10 years
20 years
40 years
Noise Monitoring
(cost $12/worker x
14.5 million workers)
174
713.4
1222.2
1843.4
2318.9
Audiometric Testing
(cost $20/worker x
102
418.2
716.4
1080.6
1359.4
5.1 mi 11 ion workers)
TOTAL Monitoring and
Testing
276
1131.6
1938.6
2924
3678.3
Hearing Protectors
(cost $10/worker x
51
209.1
358.2
540.3
679.7
5.1 mi 11 ion workers)
TOTAL Hearing Protectors,
Monitoring and Testing
327
1340.7
2296.8
3464.3
4358
*Assuming:
cost/worker for noise monitoring, audiometric testing and hearing
protectors based of BBN estimates
14.5 million workers in workforce; 5.1 million workers exposed to
sound levels greater than 85 dBA
discount rate at 1%
-------
4-19
the incremental dollar savings of a less stringent standard are reduced by
the additional costs of audiometric testing and hearing protectors.*
k.5 Assumptions and Limitations
The following are the assumptions contained in our treatment of the costs
of the proposed noise standards in the workplace. It is our intention to
be as explicit as possible in stating our assumptions so that the reader may
modify the analysis as additional information becomes available or other
assumptions appear more appropriate. We assume:
BBN capital cost estimates for compliance
BBN maintenance cost estimates equal to 5% of capital costs
no direct assessment of labor and capital productivity changes
costs to go from 90 dBA to 85 dBA equal the incremental compliance
costs ($7-9 bill ion)
3% per year reduction in capital cost estimated by considering:
1) the firm's opportunity to introduce quieter equipment
through normal capital replacement, and
2) cost decreases from technological change in the production
and installation of noise control equipment.
Note: This tacitly assumes no technological breakthroughs in
either the noise control field or those Industries with severe
noise problems.
Capital costs for the 2nd 25 year time frame are equal to BBN
estimate for current compliance adjusted by a.40 multiplier for
cost reduction for technological change and inclusion of noise
control in machine design.
a discount rate of 7%
qualitative treatment of tax implications
*The important Issue of reliability of audiometric testing and hearing
protectors is raised in Section 8.
-------
4-20
cost of noise monitoring and audiometrlc testing are not included
in the compliance cost calculation
cost estimates do not reflect the dollar savings that would be
achieved through the use of administrative controls and possible
use of hearing protectors in lieu of engineering controls.
This concludes our examination of the costs to industry from complying
with the proposed noise standards. The next section will discuss the
benefits that will accrue to the workers and to industry from the expendi-
ture of the compliance costs.
-------
5. BENEFITS
As in the case with the costs, many of the benefits of reducing workplace
noise can only be estimated with considerable uncertainty. Nonetheless, if
care is taken in the analysis it is possible to make benefit calculations
which clarify the likely social efficacy of different noise standards and
compliance scenarios. Further, it Is possible to clarify how assessments of
the benefits change with:
different ways of defining the benefits (such as different "fences")
specific variables (such as "worker mobility") and assumptions.
Toward these ends, we present here the results of some exemplary calcula-
tions of the likely magnitude of hearing conservation and some other benefits.
These calculations are based on the noise exposure data developed by BBN.
Additionally, the hearing Impairment estimates utilize:
the "equal energy rule" to compute equivalent continuous exposures
for workers who spend portions of their working life at different
noise levels, and
relationships between noise exposure and hearing impairment
derived from Baughn'
the age distribution of workers in 19 industries in 1970
Important qualifications and assumptions for these calculations are listed
below in Section 5-1.A and will be elaborated in more detail in the Appendix
to this report.
'Baughn, W. L.: Relation Between Daily Noise Exposure and Hearing Loss Based
on the Evaluation of 6835 Industrial Noise Exposure Cases, AMRL-TR-73-53.
NT IS, Springfield, Virginia (1973).
*There are many differences between our calculations and those presented in
the Inflationary Impact Statement (IIS). Our use of an appropriate age
cross-section of the population, for example, enables us to determine the
numbers of people experiencing different degrees of hearing Impairment at
any one time In the future.
5-1
-------
5-2
5.1 Hearing Conservation*
5.1.1 Measures for Defining Benefit
The Concept of "Fences"
The measures used for defining hearing impairment have given rise to
great confusion, some of which is reflected in the IIS. Fundamental to a
proper understanding of hearing conservation benefits is an appreciation
of the fact that noise causes a change from one population distribution
of hearing levels to another:
Essentially the entire population of workers has worse hearing because of the
influence of noise. Those which, without noise, might have had excellent
hearing are shifted so that they have less than excellent hearing. Those which
without noise, would have had only fair or poor hearing have their hearing
handicaps increased.
The usual practice in the pastand that used in the IIShas been to
draw a single line, or "fence", at a particular hearing level**and determine
the number of people moved from one side of the fence to the other side of
the fence by the influence of noise. This procedure has been
misleading because many have interpreted numbers of people crossing the
single fence as the total numbers of people "harmed" by a particular noise
exposureand hence potentially benefited by noise control.
*For a discussion on the discounting of hearing conservation benefits
see P.5-^3-
**Most commonly, the fence is drawn at 25 dB averaged at .5, 1,2 kHz
Number of
Pebple
y ^Jigh" fence
Hearing Level
Re: ISO
-------
5-3
This difficulty can be mostly overcome if, instead of using a single
fence, a series of fences is used to describe the spectrum of hearing
impairment experienced by the population under the influence of noise. In
A
our work, we have chosen to use fences at 20, 25, and 50 dB to determine the
numbers of people who are placed into 20-25, 25~50, and over 50 dB "hearing
& /C
level categories" because of the influence of noise. Thus we determine
the changes in the numbers of people experiencing what might be described
as "mild", "moderate" and "severe" hearing impairment for different noise
control standards and compliance scenarios.
Equilibrium vs. Pre-Equilibrium Benefits
There is another feature of hearing conservation benefits which is
fundamental for purposes of definition. The population distribution of
hearing levels at any one time reflects not only present noise exposures but
noise exposures which have been experienced over the entire period of the
population's work history. In the case of workers in their sixties, this
history covers forty years or more. Therefore, it must be expected that even
if full compliance with a 90 dBA or an 85 dBA regulation could be achieved
at once by the end of today, the full equilibrium change in the population
distribution of hearing levels would not be seen for at least forty years
into the future. Figures 5.1 and 5.2 show the approximate rate at which
the benefits of 90 and 85 dBA regulations (measured as the numbers of people
prevented from being in different hearing level ranges at any one time)
approach their ultimate equilibrium values. (Equilibrium Is achieved some-
what more rapidly for the milder categories of hearing impairment because
younger age groups contribute somewhat more to these groups and young
populations come to equilibrium faster.)
*Averaged at .5, 1, 2 kHz Re: ISO. Throughout this discussion, unless other-
wise stated, hearing levels are expressed for the average of these three
frequencies.
**ln all cases in this work the numbers of people In those categories due to
noise is after' subtraction of the people who would be in the same categories
because of presbycusis alone.
The effect of Including the "mild" 20-25 dB (.5, 1, 2) hearing impairment
category will be qualItatively similar to the result of using a 25 dB fence
for hearing levels defined by 1, 2, 3 kHz frequencies.
-------
100
90
BO
70
* ULTIMATE EQUILIBRIUM
BENEFIT 60
(NUMBER OF WORKERS JO
AT AMY ONE TIME
PREVENTED FROK lป0
EXPERIENCING HEARING
LEVELS IN INDICATED }0
RANGES)
20
10
Figure 5.t
HEARING CONSERVATION BENEFIT AT
DIFFERENT TIMES AFTER COMPLIANCE
90 dBA REGULATION
25-50 dB,
> SO dB
20
TIME AFTER COMPLIANCE (YEARS)
+ฆ AO
-------
% ULTIMATE EQUILIBRIUM
BENEFIT
(NUMBER OF WORKERS
AT ANY ONE TIME
PREVENTED FROM
EXPERIENCING HEARING
LEVELS IN INDICATED
RANGES)
100
30
80
70
60
50
40
30
20
13
0
Figure 5.2
HEARING CONSERVATION BENEFIT AT
DIFFERENT TIMES AFTER COMPLIANCE
.85 dBA REGULATION
TIME AFTER COMPLIANCE (YEARS)
-------
5-6
"Stock" and "Flow" Measures of Heaving Conservation Benefit
We have dealt with this equi1ibrium/pre-equi1ibriurn problem in the
following way:
9 Ultimate equilibrium benefits are expressed with a "flow" concept
the number of people at any one tIme after equi1Ibrium who have
been prevented from experiencing various degrees of impairment
(20-25 dB, 25-50 dB, over 50 dB) by the noise regulation and
compliance scenario under study.
Pre-equi1ibrium benefits are expressed with a "stock" concept--
the number of person-years of impairment In the three hearing level
categories prevented by the compliance scenario before the
establishment of the 40-year equilibrium.
The latter measure of benefits can be appropriately compared with the present
value of total compliance costs computed in the "Cost" section above, since
both are "stock" measures of cumulative effects over the same time period.
The former measure, showing the ultimate flow of benefits at equilibrium,
should be compared with the ultimate flow of compliance costs for maintenance
and replacement of noise controls in the far future.
Table 5.1 shows hearing conservation benefits of different compliance
scenarios expressed with these two measures. It may be noted that the
"85 dBA (5 years)" compliance scenario and the "90 dBA (5 years), 85 dBA
(10 years)" scenarios have the same ultimate equilibrium benefit because the
final compliance level of 85 dBA Is the same. However, the five-year delay
in implementation of 85 dBA compliance between the two scenarios Is reflected
in the larger pre-equi1i bri um benefit (in person-years) of the 85 dBA (5 years)
scenario.
*For purposes of comparison, "equilibrium" In the calculations Is assumed to
occur at exactly 40 years after Initial compliance Is complete (year 45 In
Figure 4.3 of the "Cost" section).
-------
5-7
Table 5.1
RELATIONSHIP BETWEEN TWO MEASURES
OF HEARING CONSERVATI ON BENEFITS
Equl 1 i.brlum
Measure
Pre-equ!1tbrium
Measure
Millions of Workers
Prevented From
Experience Hearing
Levels Greater Than
25 dB At Any One Time
Mill Ions of
Person-Years of
Impairment Over
25 dB Prevented
Before Establishment
Compliance Scenarios After Ultimate Equilibrium Of Ultimate Equilibrium
Present Exposures Unchanged
Comply 90 dBA within 5 yrs.
Comply 90 dBA within 5 yrs.;
Comply 85 dBA within 10 yrs.
Comply 85 dBA within 5 yrs.
.77
1.35
1.35
16
28
30
-------
5-8
Hearing Impairment Within Different Hearing Level Categories
For simplicity, in Table 5.1 and some other tables we have presented
results using only the "over 25 dB" hearing level categorywhich is the
sum of "25-50 dB" and "over 50 dB" categories. As per our earlier discussion,
for ultimate policy purposes it must be borne in mind that hearing impairment
is a continuum. Figure 5-3 shows the results of expressing the ultimate
equilibrium benefits in our three designated hearing level ranges. It can
be seen that of the hearing impairment over 25 dB prevented by either the 85 dBA
or the 90 dBA regulations, approximately 15% represents hearing impairment in the
severe "over 50 dB" category.* Further, the number of people prevented from exper-
iencing 20-25 dB hearing levels is approximately 1/3 as large as the number
of people prevented from experiencing hearing levels over 25 dB.
5.1.2 Factors Affecting the Benefit Calculations
Other than the noise standard level and compliance scenarios (which will
be covered below) the major variable of importance in determining the level
of benefits expected from noise control is worker mobility. The dose-
A *
response curves for notse-induced hearing damage are such that the larger the
mobility of the working populationthat is, the more that the noise exposure
of a given job is spread among a larger population by job exchangethe
larger the hearing impairment effect of that job on the population as a whole.
Although a particular job-exchange between worker "A" in a noisy job and
worker "B" in a quiet job will certainly reduce the probability that worker
"A" will cross any given "fence" of hearing level, in general the increase in
the probability that worker "B" will cross the fence because of the job-
exchange more_than_comฃensateฃ on a population basis for the benefit received
by "A". As can be seen in Figure 5.^, this is true whatever hearing level
category is examined and the differences between calculations based on
different indexes of job mobility are very substantial.
*The policy maker may choose to value the prevention of Impairment over 50 dB
more highly than the prevention of Impairment In the 20-25 dB or 2$~50 dB
categories.
**That Is, the relationship between noise "dose" and hearing Impairment "response".
***At least for the Baughn damage-risk data. Calculations based on the Robinson
data are expected to be similar but this requires confirmation In future work.
The worker mobility calculations for the MS are defective In that they seem
to neglect all the hearing damage produced In workers who stay at any one noisy
job less than 3 years.
-------
FIGURE 5-3
HEARING CONSERVATION BENEFITS, AS DEFINED BY
DIFFERENT "FENCES",
FOR DIFFERENT COMPLIANCE LEVELS
(IN MILLIONS OF WORKERS AT EQUILIBRIUM)
NUMBER OF WORKERS EXPERIENCING
HEARING LEVELS IN SPECIFIED RANGES
BENEFITS OF REGULATION
25-50 dB
20-25 dB
25-50 dB
COMPLY
90 dBA
20-25 dB
25-50 d
COMPLY
85 dBA
\-n
1
10
* ALL HEARING LEVELS ARE AVERAGES AT .5, 1, 2 KHz RE: ISO.
-------
PRESENT
COMPLY 90
COMPLY 85
PRESENT
COMPLY 90
COMPLY 85
PRESENT
COMPLY 90
COMPLY 85
EFFECT OF WORKER MOBILITY ON THE NUMBER OF WORKERS
EXPERIENCING HEARING LEVELS OVER 25dB AT ANY ONE
TIME AFTER THE ESTABLISHMENT OF EQUILIBRIUM
(IN MILLIONS OF WORKERS)
NUMBER IMPAIRED BENEFITS OF REGULATION
WORKER
MOBILITY
OF ONE
WORKER
MOBILITY
OF THREE
WORKER
MOBILITY
OF NINE
FIGURE 5.4
-------
5-11
For our calculations (except where otherwise stated) we have chosen to
use a job mobility index of 3meaning, on average that workers of all ages
in noisy jobs (greater than 80 dBA) have spent an average of 1/3 of their
working lives at the noise level of their present job and 2/3 of their working
lives at quiet jobs, (80 dBA). Precise determination of the actual job
mobility of workers in noisy jobs is exceedingly difficult from available
information, but data shown in Table 5-2 indicates that, on average, the
general population of all employees has spent approximately 1/3 of their
working time on jobs at their present establishment.
5.1.3 Benefits of Different Compliance Scenarios
The Effect of Standard Compliance Level on Ultimate Equilibrium Benefits
Table 5-3 shows the effect of various standard compliance levels on the
magnitude of the equilibrium flow of benefits within different hearing level
categories. The expected benefits of an 85 dBA regulation are substantially
larger than the expected benefits of a 90 dBA regulation. An 85 dBA regula-
tion will produce nearly a 90% reduction in the number of workers in the
"severe" (over 50 dB) hearing impairment category due to noise*, whereas a
90 dBA regulation will produce a reduction of only about 50%. Similar results
can be seen for the 25-50 dB category. Further, for the milder 20-25 category
the benefits of the 85 dBA regulation increase proportionally more than the
benefits of the 90 dBA regulation.
Benefits of the different Compliance Scenarios
Figure 5.5, similar to the illustrations in the cost section, diagrams
the scenarios for which we have computed benefits. Figure 5.6 shows a "stock"
measure (person years > 25 dB) of those benefits for the first forty years
after initial compliance (corresponding to the period from year five to
year forty-five on Figure 5-5). it can be seen that the two-step "90 (5 year),
85 (10 year)" scenario produces about 932> of the person-years of hearing
conservation benefit over 25 dB as the 85 (5 year) scenario. We should note,
however, that because of the more rapid equilibration of the 20-25 dB
*"due to noise" means that the total numbers given for present exposures are
t'ie additional numbers of people in each hearing level category after sub-
traction of the numbers of people in each category due to presbycusis alone.
-------
5-12
impairment category (see Figures 5.1 and 5-2) the five year delay will produce
a somewhat smaller proportion of the benefit in the 20-25 dB range (i.e. < 93% )
Table 5.2
PROXY MEASURE OF WORKER
HOB ILITY FOR DIFFERENT AGE GROUPS*
A
B
A * B
Age
Average Number of
Years Since Age 18
Average Job
Tenure in Years at
Current Establishment
Measure of
Worker Mobi1i ty
20-24
4
1.69
2.37
25-3^
11.5
3.84
2.99
35-^4
21.5
7.27
2.96
45-54
31.5
11.23
2.80
55-64
41.5
14.41
2.88
over 65
50
16.05
3.12
*Based on data from "Job Tenure of Workers" January 1973, Special Labor
Force Report 172, Table A, Age: Tenure of Current Job, January, 1973.
CAVEAT: A number of factors will tend to make these all-employee averages
over- and under-estimate the effective job mobility of noise-
exposed workers for hearing impairment calculations:
Factor tending to produce totter effective job mobility than
indicated by the all-industry averages:
A worker transferring from a noisy job at one establishment
to a similarly noisy job in another establishment Is counted
as having moved for purposes of the data. However, since such
a worker's noise exposure has not changed, no Job mobility has
occurred for the purpose of computing hearing impairment
impact.
Factor tending to produce higher effective job mobility than
indicated by the all-industry averages:
A worker transferring from a noisy job to a quiet Job at the
same establishment is not counted as having moved for purposes
of the data. However, since such a worker's noise exposure has
changed, job mobility has occurred for the purposes of computing
hearing impairment impact.
Factor producing a bias of uncertain direction:
-Noise-exposed workers may have higher or lower average Job
mobility than the average of all employees.
-------
5-13
TABLE 5.3
EQUILIBRIUM* BENEFITS
OF DIFFERENT COMPLIANCE LEVELS
Workers in Each Hearing Level Range/100 Jobs
In All Industry Due to Noise**
Benefits Achieved by Compliance
to Spec Ified Level
s
Hearing Impairment
With No Change
In Exposures
90 dBA
87.5 dBA
85 dBA
82.5 dBA
20-25 dB***
No. of Workers
Per J00 Jobs
6.98
1.48
2.22
3.37
5.00
% of Reduction in
No. of Workers
21.3
31.8
48.3
71.6
25-50 dB***
No. of Workers
Per 100 Jobs
11.33
4.65
6.13
7.99
9.49
% of Reduction in
No. of Workers
41.0
54.1
70.5
83.8
***
> 50 dB
No. of Workers
Per 100 Jobs
1.597
.753
985
1.391
1.453
% of Reduction in
No. of Workers
47.1
61.7
87.1
90.9
^Ultimate Equilibrium greater than 40 years after compliance
**After subtraction of presbycusis
***(.5, 1, 2 KHz) Re: ISO
-------
5-14
COMPLIANCE SCENARIOS
Compliance
Levels
FIGURE 5.5
-------
5-15
HEARING CONSERVATION BENEFITS
Benefits
millions OF
PERSON-YEARS
OF IMPAIRMENT
OVER 25 dB
PREVENTED
DURING THE
FIRST
YEARS AFTER
COMPLIANCE
30
25
20
15
10
0
NO
REGULATION
COMPLY COMPLY COMPLY
90 90 85
5 YEARS 5 YEARS; 5 YEARS
85
10 YEARS
FIGURE 5.6
-------
5-16
Benefits of Different Compliance Scenarios in Different Industries
As will be discussed in more detail in the Appendix, the BBN data on
current noise exposures in individual industries must be regarded as
provisionalalthough they represent the best information available. Based
on this data, Table 5-b presents the results of calculations of the expected
benefit produced by implementing the various compliance scenarios in'different
industries. It is possible that if the underlying data are confirmed and
adjusted where necessary, similar calculations might help form the basis
for rational choices between different compliance scenarios for different
industries.
-------
TABLE 5-4
PERSON-YEARS OF NOISE-fNOUCED IMPAIRMENT OVER 25 dB
DURING THE FIRST FORTY YEARS AFTER ATTAINMENT OF YEAR-FIVE COMPLIANCE
(IN WILLIONSOFPERSON-YEARS)
Hearing Impairment Prevented By
Different Compliance Scenarios
Compliance Scenario*
0
0
F
C
SIC
INDUSTRY
Impairment
Wi th No Changes
in Exposures
Present
90 {Syr)
90 (5yr),
85 {10yr)
85 (5yr)
20
Food and Kindred Products
3-97
0
.783
1.418
1.551
21
Tobacco Manufacturers
.158
0
.036
.050
.053
22
Textile Mill Products
n .4i
0
3>7
4.78
5-03
23
Apparel 6 Other Textile Products
ฆ 9&
0
-017
.058
.068
2k
Luraber aid Mood Products
10.1s
c
5.25
4.66
25
Furniture arid Fixtures
7.95
c
.277
.601
.t7&
26
Paper and Allied Products
2.23
0
.300
.714
.807
27
Printing and Publishing
1.71
0
.201
.722
.851
28
Chemicals and AT lied Products
3-66
0
.766
1.316
1.429
29
Petroleum and Coal Products
2.31
0
.702
-917
955
30
Rubber and Plastic Products
1.87
0
.296
-570
.630
31
Leather and Leather Products
.197
0
.004
.011
.013
32
Stone, Clay ฃ Glass Products
1.60
0
-309
.476
513
33
Primary hetat Industries
13-15
0
3-89
5-42
5-72
34
Fabricated Metal Products
5.06
0
1 .254
1.92
2.05
35
Machinery, except Electrical
4.90
0
1.147
1 -757
1.885
36
Electrical Equipment 6 Supplies
.90
0
.07 0
.208
.242
37
Transportation Equipment
3-75
0
.846
i -373
1.482
*9
Electric, Gas ฃ Sanitary Services
4.03
0
.417
1.221
1.412
ALL
tNDtiSTRY TOTAL
74.75
0
17-98
27.94
29-99
* Year-Five Compliance corresponds to Year-Five on Figures 4.2 C,D, and F.
**See Figure 4.3 for a graphical representation of the lettered compliance scenarios.
-------
5-18
5.1.4 Assumptions and Limitations of the Calculations
Time does not permit a full exposition here of all the appropriate
caveats with respect to basic data, assumptions, and detailed methodology
for the results presented above. In this section we shall list some of
these features which will be covered in more depth in the Appendix.
Uncertainties in the BBN exposure data by industry
--Small sample size within industries, possibly unrepresentative
Failure to use objective instrumentation for noise measurement
--Expression of employee exposures in terms of a 5 dBA time-
exposure trading rule, necessitating an uncertain adjustment of
the data for industries where noise intensity fluctuates during
the day and the appropriate 3 dBA trading rule would give a
substantially different equivalent continuous exposure value.
Procedural Assumptions
The Baughn damage-risk data for predicting hearing impairment.
The equal energy rule for calculating equivalent continuous noise
exposures for populations with varying exposures through working
1 ife.
The age distribution of the worker population in the 19 industries
in 1970 (considered, for the calculation to be unchangingly
representative of the age distribution of the worker population
into the far future).
The number of production workers employed will be constant over
the next forty years at levels corresponding to 197^ average
employment in each industry.
Exclusion from consideration of people who have left the workforce
but who may bear hearing impairment caused by work through their
retirement years.
Worker mobility of 3 for all age groups and all industries. No
distinction between male and female workers (who may differ
substantially in average mobility).
Definition of "compliance" with a specified exposure level as
bringing all employees above that level exactly down to that level.
(In other words, for "compliance with 90 dBA" calculations, it was
assumed that the effect of a 90 dBA regulation would be on balance
to bring all workers with exposures above 90 dBA to 90 dBA).
Although there are a number of areas where the existing calculations
can be refined, we believe that such refinements will not substantially
alter the conclusions.
-------
5-19
5.2 Other Benefits
Hearing conservation is the benefit of noise control about which we have
the most information and which we can quantify with greatest confidence.
However, it is by no means likely to be the only benefit. Although the other
benefits of noise control cannot be assessed with the same accuracy as
hearing impairment, some "best expected value" or other treatment of these
benefits is essential for the proper assessment of the social efficacy of
alternative noise standards.
5.2.1 Absenteeism Costs Saved
Noise as a Factor That Influences AbsenteeismData Sources
The extensive literature on Industrial absenteeism and its control in-
cludes numerous attempts to define causes of absence in an effort to reduce
absenteeism at Its source. Among the factors which some experts believe
contribute to high absenteeism are the physical characteristics of the work
environment, Including dust, heat, fumes, and noise.' An increased tendency
toward absenteeism may result from workers' psychological aversion to return-
ing each day to an unpleasant environment, as well as from any physiological
effects to which noise contributed.
Until recently, there have been no data which link occupational noise
exposure to absenteeism with sufficient controls to insure significance. This is
because of the close association between noise exposure and other characteristics
of the work population in noisy Jobs (such as age, experience, socio-
economic status, other exposures on the Job, etc.). One study, prepared by
the Raytheon Service Company and completed in May 1975ป compared accident,
Illness, and absence rates for workers In a boiler manufacturing plant who
were exposed to high (95 dBA or higher) and low (80 dBA or lower) noise
before and after a hearing conservation program had been instituted.* The
basic objective of the study was to determine If the Increased frequency of
'john M. Knight, How to Reduce Absenteeism, American Foundrymen's Society, 1973,
p. 11; Donald L. Hawk, "Absenteeism and Turnover", Personnel Journal, Vol. 55,
No. 6 (June 1976), p. 295.
*The Raytheon study was sponsored by the National Institute for Occupational
Safety and Health under Contract No. CDCซ-99*"7^~28. A condensed version of the
final report, entitled "The Influence of a Company Hearing Conservation Program
on Extra-Auditory Problems of Workers", prepared by Dr. Alexander Cohen of NIOSH
was used for this study.
-------
5-20
absences (and injury and illness) observed in a previous study among workers
exposed to high noise would show a significantly lower absence (and injury
and illness) rate after implementing a hearing conservation program involving
the use of hearing protectors. Workers in both high and low noise groups
were made part of the program. If excessive noise were a factor contributing
to increased absenteeism, then it would be expected that absences would
decrease after the noise Ipvels were reduced.
The absenteeism data collected over' two 2-year periods (before and after
hearing conservation) were compared separately for high and low noise groups.
The high noise group exhibited a median reduction in the total days absent
over the 2 years during the program from 19.7 to 7-3 days per worker.' The
average reduction in total days absence within the high noise group was from
30.1 to 15.0 days per worker. Both the average and median reductions in
medical days lost per worker (after the reduction in noise exposure) were
by 50% or more.
While the Raytheon study made serious efforts at control for outside
Influences, the results are tempered by various methodological considerations
and other factors. The limitations of this study are discussed below.
In the high noise group, 60 out of ^17 workers did not use hearing pro-
tectors during the conservation program. Yet absences among non-users went
down almost as much as among users. The study suggests that this result
could be attributable to several factors:
1) The "Hawthorne" effect created by increased management interest
o
in employee health and safety caused increased employee attendance.
2) The method for rating use or non-use of hearing protectors by
workers had methodological shortcomings. This classification was
made by three levels of supervisors (plant safety engineering staff,
line foremen, and research study staff) rather than workers themselves.
'cohen, op. clt., pp. 12, lAa.
Cohen, op. cit., pp. 18, 25.
-------
5-21
In addition, the judgments were made at the end of the 2-3 year
program as to the use or non-use over the entire period.' There-
fore, more workers in the high noise group could have used ear
protection than were given credit for by the rating system used.
Audiometryc test data collected after the hearing conservation
period suggest a more wide-spread use of hearing protectors than
the ratings would indicate. No signs of further deterioration in
the hearing of the high noise group was observed after the 3-5
years between pre-hearing and post-hearing conservation audiograms
Estimates of Reduced Absenteeism Due to Noise
Methodology
Raytheon and CPS data were used to compute the potential realizable reduc-
tion of medical absences due to noise per manufacturing production worker.
An assumption was made that the Raytheon experience would represent an upper
bound for absenteeism reduction. The CPS data was used to estimate noise-
related absence based on actual medical and non-medical absences of the two
SIC industries with the highest and lowest absence rates per worker per year.
The equation In Table 5-5 was developed in order to compare the more general
CPS data with the noise-specifIc Raytheon data.
In order to arrive at a best guess of the likely effects of noise on
medical absences, it is necessary to know the relationship of the Raytheon
absence experience to the absence in the manufacturing sector. For this pur-
pose, we utilized absence data summarized from the 1972 Current Population
Survey (CPS) of households conducted by the Bureau of the Census for the
Bureau of Labor Statistics. It Is the only source of systematic national data
on job absences by Industry and worker characteristics. While data from em-
ployers would be preferable, fewer than two-fifths of all workdrs are employed
3
in firms which keep absence records. Therefore, the CPS data, available by
2-digit SIC codes, were utilized in the following estimates.
'cohen, op. clt., pp. 7> 23.
2
The data have been summarized and analyzed by Janice Nelpert Hedges, "Absence
from Worka Look at Some National Data',' Monthly Labor Review, Vol. 96, No. 7
3lbld.,p. 25.
-------
5-22
Table 5.5
Equation for Total Reduced Medical Absenteeism Due to Noise
(Per Worker Per Year)
A = (f,) (f2) (f3) (f^Ja
where
a = reported average yearly absences of full-time production
workers in the manufacturing sector, based upon 1972-1973
data.
fj = realizable fractional reduction of absenteeism due only
to noise.
f2 = average fraction of medical absence due to noise.
(fj) {fy) = realizable reduction in medical absence due to noise.
f, = fraction of the average total unscheduled absences attrib-
utable to illness or injury related (medical) causes.
fjj = correction factor for the difference between the rates of
medical absences of production workers and non-production
workers.
(f1)(f2)
To establish the realizable reduction in medical absence due to noise
(f 1) (f2) fฐr manufacturing sector, the assumption for the upper bound
is the 50% reduction found for the Raytheon population. For the lower
bound, the assumptions differ for absences of less than one week and absences
of one week or longer (taken from CPS data). Noise exposure can be expected to
have a larger Impact on shorter medical absences because of the annoyance factor
and potential decrease In well-being on the Job, In the case of medical absences
of one week or more, a lower fraction of days would be attributable to noise
(1/20). Noise itself may not be the direct cause of the week-long absence
but may cause a worker who is already absent for four days to remain absent
for a fifth day, thereby placing the reported absence into the week-or-more
category.
-------
5-23
The fraction of the average total unscheduled absences attributable to
medical causes (f^) differs from ml seellaneous causes such as family business
and responsibilities, jury duty and funeral leave. For absences of one week
or more, where data were available only for total absences, the assumption is
that for the upper bound 90% of long-term absences are medical. For the
lower bound the assumption is that the same fraction of week-or-more absences
are medical as for absences of less than one week. (This fraction is 2.9A.7).
Regarding the correction factor accounting for the difference between
the rates of medical absences of production workers and non-production workers
(f^), the assumption is that production workers have twice the long-term
absence rate (one week or longer) as non-production workers. This approxima-
tion is supported by data on absence rates by occupation, found in Appendix
Table 5.6 illustrates the above procedures used to compute preventable
noise-related absences based on Raytheon and CPS recorded absence data. The
annual per-worker preventable absence derived front) the Raytheon study is 6.2
days (median) and 4.8 (average). Based on Current Population Survey data,
the maximum estimate for the manufacturing Industries with potentially high
and low absence rates is 3ซ9 days and .8 per worker respectively. The CPS
calculations could be applied as well to SIC industries between these ranges.
The Raytheon and CPS absence data are not strictly comparable without
an adjustment because the Raytheon figures are the absence prevented by
bringing down the noise-exposed population to below 80 dBA, while the estimates
based on the CPS data assume a reduction from present exposure to 85 dBA.
The adjustment is made later in the text.
-------
5-2U
Table 5.6
REDUCED
MEDICAL ABSENTEEISM DUE
(PER WORKER. PER YEAR)
TO NOISE
a
fl x f,
u
fi,
days absent
per worker
preventable
Raytheon production workers
full time
medical absences/year
9.85
j|^y (media/i)
1
1
(by reducing
exposure to
below 80 dBA)
6.2
9-85
loir <ซป>
1
1
4.8
manufacturing (avg. 20 SIC)
full t1me
medical absences
number of absences less than one
week
(by reducing
exposure to
85 dBA)
_ upper bound
~ j lower bound
1
1
1A.
2.9
hi.
2.9
1.7
.7'
\
20 SIC codes, total workers
ful1 (and partf time
medical and non-medical absences
numbers of absences of one week or
more duration
\
upper 3-9
lower .8
/
4.1 (SIC 21) upper bound
1^0
30.1
To
UU
2.9
2.2
/
1.8 (SIC 27) lower bound
1
To
ฃ7
2.9
/
.1
Sources:
a Alexander Cohen, "The Influence of a Company Hearing Conservation Program on Extra-
Auditory Problems In Workers," paper condensed from final report prepared by the
Raytheon Service Company In May 1975, from a study sponsored by the National Institute
for Occupational Safety and Health.
^ Janice Nelpert Hedges, "Absence from Work: A Look at Some National Data," Monthly
Labor Review. Vol. 96, No. 7 (July 1973). p. 27. Based on Bureau of Census data from
1972 Current Population Survey.
C We assume part time workers do not contribute significantly to long-term absence rates.
-------
5-25
Calculation Results
The Raytheon average annual absence rate of k.8 should be considered in
a proper context both because of the limitations of the study as mentioned
previously and because the Raytheon population excludes workers exposed to
noise levels between 80 dBA and 95 dBA. Absence rates for workers exposed
within this range are uncertain. While one can postulate that less noisy
environments may contribute to less noise-related absence, the exact relation-
ship has not been suggested. Because k.S days may be a relative overestimate for
lower noise levels, we have assumed a halving of this rate for every 5 dBA
reduction in exposure lower than 97-5 dBA (see Table 5.7)*
Effects of g 90 dBA Standard
Worker days saved (In thousands) =
( 1196.70
3-1 )
( 1538.07
0.7 )
Workers at
97-5 brought
to 90 dBA
Days saved
per worker
Workers at
92.5 brought
to 90 dBA
Days saved
per worker
= 4,786.419 days
(38,291.4 hours)
Effects of an 85 dBA Standard
Worker days saved (in thousands) -
( 1196.70 x 3.9 )+ ( 1538.07
1.55 ) + ( 1840.96 x 0.35 )
Workers at Days saved
97-5 brought per worker
to 85 dBA
Workers at Days saved
92.5 brought per worker
to 85 dBA
Workers at
87.5 brought
to 85 dBA
Days saved
per worker
7,695.48 days
(61,563.8 hours)
These data are presented in columns 2 and 3 of Table along with cost
data (columns 4 and 5).
-------
5-26
Table 5-7
CALCULATION OF PERSON DAYS SAVED PER WORKER
EXPOSED AT DIFFERENT LEVELS (BASED ON RAYTHEON STUDY)
Exposure
Before
Regulation
Population
Exposed*
(Thousands)
Days Saved Per
Worker Per Year
By Reduction To
Less Than 80 dBA
97.5
92.5
90
87.5
85
<80
1196.70
1538.07
1840.96
4.8
2.4
1.7
0.85
3.1
2.4
0.7
0.5
0.85
0.35 ^
3.95
^ 0
*See Appendix.
-------
5-27
Using the low and high estimates for days saved based on the CPS data
yields comparable data, also found in Table 5.8 since the estimates 3.9 and
0.8 were made for the savings of bringing the present exposed population to
85 dBA, the entries for CPS data are simply in the ratio of 39/3-95 and 0.8/3.95
where 3.95 is the days saved in bringing the Raytheon population down to
85 dBA. (See Table 5.7).
It should also be noted that the Raytheon experience is based on the
use of hearing protectors and not engineering or administrative controls.
Consequently, decreases in absence rates as a result of compliance with
engineering or administrative controls may differ from those experienced as
a result of hearing protectors use. It can be postulated that engineering
controls, which eliminate the presumed discomfort associated with hearing
protectors, would decrease absences even more than hearing protectors. The
Raytheon study suggests the possibility that hearing protectors may, under
certain circumstances, actually increase absenteeism. The median absence
rate of the group of workers exposed to 80 dBA or lower increased by 68%
after the use of hearing protectors.^
Table 5.8 utilizes preventable absences due to noise for the two sets of
estimates to compute total annual savings for proposed 90 dBA and 85 dBA
regulations. The wage rate is used as the lower bound because it represents: (])
the value of the last unit of labor assuming profit maximizing behavior on
the part of firms in the Industry and, (2) it ignores the costs of worker training
and fringe benefits. The value added per production hour is an upper bound
because it is an average, not marginal, concept of the value added per production
worker and includes the contribution of other factors of production.
It would be unrealistic to use only the wage rate as a proxy for lost pro-
duction for the following reasons:
The marginal productivity theory of labor has two simplifying
assumptions which must be further considered if the wage rate
Is used to approximate the cost to society of the output lost
due to unscheduled noise-related absences: (l) workers are
assumed to be perfectly interchangeable and of equal efficiency,
'cohen, op. clt., p. 13a.
-------
5-28
Table 5-8
COMPUTATION OF ANNUAL ABSENTEEISM
SAVINGS UNDER DIFFERENT REGULATIONS
Medical Absence
Due To Noise
Absenteei sm
Savings
Standards
Eight Hour
Days Saved
Per Year
(In Mill ions)
Person-hours
Saved
Per Year
(In Mill ions)
Total 1971
Product ion
Worker Wages
(inflated
to 1975,
$ mi 11 ion)
1 hr = $5.54
Total 1971
Va1ue Added
Per Prod.
Worker (in-
flated to
1975,$mi11 ion)
1 hr = $20.28
Estimate Based on Absence
Reported In Raytheon Data
90 dBA Std.
85 dBA Std.
4.785
7.695
38.29
61.56
212.1
341.04
776.5
1,248.4
Estimates Based on Absence
Reported In CPS Data
upper bound - 90 dBA Std.
85 dBA Std.
4.725
7-598
37-80
60.78
209.4
336.7
766.6
1,232.6
lower bound - 90 dBA Std.
85 dBA Std.
.950
1.558
7.60
12.47
42.9
69.1
154.1
252.8
-------
5-29
and (2) there is total absence of monopsony power in the labor
markets. To the extent that real world considerations deviate
from the simplifying assumptions, the wage rate would under-
estimate the cost of lost output.
absenteeism is also used in this report as a surrogate for
decreased productivity for those workers who are physically
present but because of the high noise levels are not working
efficiently.
unscheduled noise-related absences of key personnel may disrupt
normal production processes, thus imposing additional costs on
the fi rm.
loss of skilled personnel may be accelerated by higher turnover
and early retirement.
Because of the above factors, both the wage rate and the value added per
production hour are included in our calculation as bounds of the savings
from reduced absenteeism.
After calculating the annual savings from reduced noise-related absences,
these estimates were computed for a 20 and 40 year total savings. (See Table
5>9>) It was assumed that the annual savings would remain the same. Each
year was discounted to present value at a 1% discount rate and the total
savings added for 20 and kO years respectively. The differences in savings
between a 90 dBA and 85 dBA standard for each compliance period were also
computed.
The benefits of prevented absenteeism, using both the lower bound of
wage rate and the upper bound of value added, are substantial. Low and high
present-value estimates for savings arising from a 90 dBA standard are
$0.6 billion and $10 billion respectively over kO years. For an 85 dBA
standard, the low and high estimates are $0.9 billion and $17 billion
respectively. The variation between low and high savings results from a
five-fold difference In the estimates of days lost due to noise and a three-
fold difference in alternative valuations of the lost output per hour to
society. Eighty percent of the total savings is captured by the end of the
first 20 years of compliance.
-------
5-30
Table 5-9
NET SAVINGS OF ABSENTEEISM
UNDER 90 dBA AND 85 dBA REGULATIONS
(DISCOUNTED TO PRESENT VALUE)
$ Bil
1 ions
Standards
Annual
Savings
Savings Over
Fi rst 20 Years
After Compliance
Savings Over
First 40 Years
After Compliance
Wages
Value
Added
Wages
Value
Added
Wages
Val ue
Added
Estimate Based on Raytheon Data
90 dBA Standard
85 dBA Standard
Benefits of 85 dBA
Over 90 dBA
.21
34
.13
.78
1.25
.47
2.26
3.64
1.38
8.22
13.23
5;01
2.84
4.58
1.74
Tl0.33l
g6.6sj
6.32
Estimates Based on CPS Data
Upper Bound:
90 dBA Standard
85 dBA Standard
Benefits of 85 dBA
Over 90 dBA
.21
34
.13
.77
1.23
.46
2.21
3.56
1.35
8.12
13.08
4.96
2.78
4.48
1.70
10.22
16.46
6.24
Lower Bound:
90 dBA Standard
85 dBA Standard
Benefits of 85 dBA
over 90 dBA
.043
.069
.026
.16
.25
.09
.47
.72
.25
1.64
2.66
1.02
*p5?l
.32
2.07
3.35
1.28
*The entries In the boxes are the high and low cost estimates for savings
over 40 years arising from a SO dBA standard. The entries in the inverted
triangles are the corresponding estimates for an 85 dBA standard.
-------
5-31
For the purposes of estimating most-likely values for calculating the
benefit deriving from reduced absence, we use the arithmetic mean of our
low and high estimates, which also represents half the savings predicted
from generalizing the Raytheon results. Thus. $5*5 billion is the expected
benefit for a 90 dBA standard, and $8.8 billion corresponds to an 85 dBA
standard, all discounted to present value at 7%.
The calculation of the 20 and 40 year savings, stated In 1975 dollars,
are based on the assumption that compliance with either a 90 dBA or 85 dBA
standard would begin immediately after the effective date of the regulation.
For compliance scenarios which delay compliance 5 years after the regulation
takes effect, the absenteeism benefits are reduced by approximately 23%.
For the 90 dBA standard with a 5 year delay the benefits are $3.9 billion and
for 85 dBA, $6.3 billion. For 10 and 15 year delays in compliance, the
reduced benefits are $2.8 and $2.0 billion for 90 dBA respectively and $4.5
and $3.2 billion for 85 dBA respectively.
-------
5-32
5.2.2 Workers' Compensation Costs Saved
Noise Induced hearing loss has been a much controverted workers' compen-
sation issue in the last two decades. This is in part because it heralded
broad inclusion of occupational diseases into the compensation system and
because employers and carriers feared large costs if all employees with mod-
erate hearing loss filed claims for workers' compensation. Though far from
being realized, these potential costs are realistic and must be included in
any calculations of future benefits derived from the OSHA standard.
The discussion below will Include the following: 1) the total poten-
tial future loss to the society assuming that al1 those workers who would
otherwise be impaired would have made claims for workers' compensation
after 20 and ^0 years of compliance with a 90 dBA or 85 dBA standard,
2) an estimate of the current rate at which qualified workers' do in fact
receive compensation, utilizing trends in the rate of increase among states,
3) various characteristics of workers' compensation statutes and/or hearing
loss formulae which might cause an increase or decrease in the number of
claims compensated, k) other calculations of costs for hearing loss, and
5) other noise-related compensation costs associated with hearing loss.
Potential Workers ' Compensation Benefits
It should be noted that the workers' compensation claims are a one-time
cost, even- if in reality the claims may be spaced over a variety of differ-
ent times. For the purpose of our calculations we have computed the poten-
tial benefits (compensation costs saved) based on previously described
hearing loss* which assumes a total capture (i.e., a total claiming) of
workers' compensation awards. However, because of variations in the age
and mobility into and out of the workforce, we have assumed that workers
would have received compensation payments only after they leave the work-
force. Under a 90 dBA standard, workers In the impaired population leave
the workforce at a rate of 2.1% per year and under an 85 dBA standard,
at 2.8% per year.** Thus, at the end of 40 years compliance, all presently
impaired workers leave the workforce and would have received compensation
were it not for the standard. In addition, a small number of new workers
who enter the workforce shortly after the standard takes effect would leave
*See Section 5.1.
**The .1$ difference in the two rates is due to the increased age of
benefited workers In the workforce at an 85 dBA standard.
-------
5-33
the workforce after AO years and also would have been eligible for com-
pensation. The magnitude of this potential benefit is to be found in
Table 5.10 under the conditions of compliance with 90 dBA and 85 dBA.
These estimates of workers' compensation savings may be a substan-
tial underestimation of the total number of workers who might, in fact,
be eligible for compensation for noise-induced hearing damage at some-
time in their careers. The rapid advance in presbycusis-related hearing
loss tends to reduce the difference between noise-exposed and unexposed
groups at advanced age, leading to a smaller estimate of workers eligible
for compensation than if the estimate were made at a point some years
prior to retirement.
Our calculations are based on no change in present compensation sche-
dules, which may offset to some degree the inevitable fact that not all
workers who will be handicapped for compensation purposes will receive
payment. In computing the total potential awards made for partial occu-
pational hearing loss, we utilized a maximum income benefit of $19,000 for
loss of hearing in both ears as of January I., 1976.* This was derived
from an average of the maximum benefits of the ten states with the
largest number of production workers. Compensation awards for moderate
hearing impairment (10 dB shift over the 25
-------
5-3^
Table 5.10
Total Potential Workers Compensation Payments Saved
for Hearing Loss in Both Ears*
($ bi1lions)
Discounted to Present Value
$ Bill ions
Standards
Savings Over
First 20 Years
After Compliance
Savings Over
Fi rst kO Years
After Compliance
90 dBA Standard
.16
.28
85 dBA Standard
.31
.53
Benefits of 85 dBA
over 90 dBA
.15
.25
Estimate of Trends in Current Compensation Awards
Traditionally, the number and size of annual workers' compensation claims
for hearing loss have been small as compared to other types of disability payments.
However, with an increased awareness on the part of employees about health
hazards on the job, the number of compensated hearing loss cases is on the
increase. Understanding the rate at which claims are presently compensated
is useful as one benchmark for potential future increases in hearing loss
compensation benefits. Few states keep detailed statistics on workers'
compensation claims or awards. Two states (New York and Wisconsin) compute
awards data in comparable form. Table 5.11 shows their annual number of
hearing loss awards (cases closed by the state workers' compensation board)
and trends from 1970 to 1975. During this period, both states had fairly
conservative compensation statutes. Both required a six-month waiting
*This assumes that workers would have received compensation payments only
after they leave the workforce.
-------
5-35
Table 5.11
TRENDS IN WORKERS' COMPENSATION
CLAIMS FOR OCCUPATIONAL HEARING LOSS
1970-1975
Year
No. of Compensation
Cases Closed
Yearly % Change
New York*
W!sconsi n**
New York
Wisconsin
1970
101
57
-
-
1971
106
55
05
- Ok
1972
165
82
56
49
1973
227
82
38
00
197*ป
83
01
1975
151
82
Yearly
Average
150
85
33
26
*See Appendix E-1 for complete data on New York compensation
cases closed.
**See Appendix E-2 for complete data on Wisconsin compensation
cases closed.
-------
5-36
period prior to filing a claim and used a .5, 1,000, and 2,000 Hz formula
averaged over 25 dB. The annual number of cases compensated during this
period rose well over 100% in each state. The average annual rate of in-
crease for these two states was approximately 30%.* Assuming no further
increase in the rate, by the end of a AO year compliance period the number
of awards will be substantially greater than at the present time.
Clearly, individual states vary in the number of hearing loss awards
made annually. The numbers are affected by the size of the population
exposed to noise within each state, the extent of worker awareness of noise-
induced hearing loss compensation coverage and other job health issues, and
the compensation formula used to compute impairment. Trend estimates, as
tempered by various factors in the 50 workers' compensation statutes and
hearing loss formula, may be responsible for both increases or decreases
in current claims among the different states. They indicate the possible
extent to which the real world differs from the formula assumed for the
benefit calculations above.
Factors Which Decrease Estimates of Compensation Benefits
Historically workers' compensation statutes have included several
blanket exemptions. As of the end of 1975, three states (New Jersey,
South Carolina, and Texas) had elective coverage, and approximately one-
fourth (1/4) of the states had exemptions based upon the size of the
establi shment.'
The following limitations apply specifically to noise-induced
2
hearing loss:
*This trend is suggestive of several California data which indicate a 271
increase from fiscal year 197^-75 to fiscal year 1975-76 in the number of
claims filed. (See Appendix E~3.)
'a.S. Hribal and G.M. Minor, "Workers' Compensation-1975 Enactments",
Monthly Labor Review, Vol. 99, No. 1 (January 1976), p. 30.
2
These comparative hearing loss requirements are derived from Meyer S. Fox, M.D.
"Workmen's Compensation and Medical-Legal Aspects of the Occupational Noise
Problem," in Proceedings of the Workshop on Industrial Hearing Conservation,
sponsored by the National Association of Hearing and Speech Agencies,
Washington, D.C., 1971, pp. 19-20. Wherever possible, more recent (1975)
statutory changes are noted.
-------
5-37
Occupational hearing loss due to continuous noise (as opposed to
accident or trauma-induced noise) may not be compensable.*
An employee may be required to leave work for six months before
filing a claim for hearing loss compensation.** In theory, this
can occur through transfer to a non-noisy job, permanent layoff
or retirement. In practice, claims are generally not filed
until retirement. This may reduce the number of claims because
a percentage of workers either die before retirement or lose
contact with their plant during the waiting period.
The use of a higher threshold than 25 dB to determine hearing
impairment will lower the number of compensable claims. For
example, Wisconsin utilizes a 35 dB threshold for beginning
hearing loss.
A number of states either deduct or allow for possible deduction
of 1/2 decibel per year beginning at around age kO for hearing
loss due to age (presbycusis). Thus, at retirement age of 65
or over, a worker with moderate hearing loss (35-itO dB) might
not be considered impaired after the presbycusis has been
deducted. This deduction also results in a reduction of the
number of severe impairment claims.
A few states compensate for total hearing loss only.*** "Total
loss" may range from 50$ to 100% impairment.
*The 1970 data indicate this to be true for Alabama, Colorado, Idaho,
Indiana, Iowa, Louisiana, Nebraska, New Mexico, Vermont, and Wyoming. In
1975 Colorado and Louisiana changed from elective Workers' Compensation to
compulsory Workers 1 Compensation.
*#The 1970 data Indicate this to be true for Louisiana, Maine, Missouri,
New York, North Carolina, Rhode Island, and Utah. In Wisconsin, the waiting
period was recently reduced to two months.
***The 1970 data indicate that these states are Massachusetts, Michigan, Ohio,
and Pennsylvania.
^Richard Ginnold, "Workman's Compensation for Hearing Loss in Wisconsin",
25 Labor Law Journal, 693-69^ (November, 197^)
-------
5-38
Factors Which Increase Estimates of Compensation Benefits
The state of California, whose manufacturIng workforce totals
8% of all U.S. manufacturing workers, utilizes 3,000 Hz in its
hearing loss formula. Wisconsin also computes hearing handicap
using 3,000 Hz.
The Fowler-Sabine, or AHA rule, which utilizes .5, 1, 2, and k
Hz relatively weighted, may increase the number of claims slightly.
Hearing at 4,000 Hz Is considered by some experts to contribute
to speech intelligibility.*
The traditional impairment formula of 1.5% compensation for each
dB loss beyond 25 dB (up to 92 dB for 100% loss) may be modified.
For example, Wisconsin now allows for 1.75% compensation for each
dB loss.
It should be noted that a combination of the above factors is the
ultimate determinant of the hearing loss formula of any given state, and
hence, of workers' compensation claims levels. Although no attempt has been
made in this study to analyze the extent of these Individual statutory
effects, their aggregate impact Is expected to continue. This Is due in
large measure to increasing attention focused on the worker compensation
system as a result of the 1972 report of the National Commission on State
Workmen's Compensation Laws. With the threat of federal Intervention, 1ป9
states enacted in 1975 nearly 300 amendments to their compensation statutes
in order to conform with federal guidelines, including the recent changes
described above. This trend is likely to continue in the near future, with
hearing loss requirements receiving more attention once the 0SHA noise
exposure standard is promulgated.
*The 1970 data Indicate that Kansas uses this formula to compute hearing loss.
^Arlbal and Minor, "Workers' Compensation", p. 30.
-------
5-39
Alternative CaZouZations of Costs fov Noise-induced Hearing Loss
The workers' compensation system was designed to spread the costs of
work related injuries among employers, thereby reducing their individual
risk of large payments. In exchange for guaranteed payments, workers give
up their right to sue their employers under common law, except where a
specific injury or illness is not covered by the workers' compensation system.
This exception is noteworthy in the area of occupational hearing loss, par-
ticularly because the variables of state impairment formulae may exclude cer-
tain types and degrees of hearing loss from the workers' compensation system.
For example, in those states where only total Impairment Is compensable,
workers must go to court to receive damages for partial hearing loss.
Court awarded damages are considered by some to be a better Indicator
of the real value society places on harm, In part because they Include com-
pensation for such non-pecuniary damage as pain and suffering and loss of en-
joyment of life. These Items are not usually calculated Into workers' compen-
sation awards. When juries do return damage awards In hearing loss cases,
the awards can be substantially larger than workers' compensation might other-
wise provide. For example, one case for partial hearing loss (approximately
35 dB) brought a jury award of $30,000. While this study does not attempt
to estimate the extent of court awards for occupational hearing loss, this
form of compensation should be recognized as an alternative approach to esti-
mating the benefits derivable from reducing the amount of hearing loss in
the workplace.
Another indicator of the potential social cost of hearing loss Is the
"purchase cost" of hearing. This measure is often used to estimate what the
"market" price of a dlfficult-to-quant Ify Item would be. The questions "what
would you pay to have normal hearing?" or "what would you pay not to work In
high noise?" Illustrate the method by which the purchase cost of hearing loss
and high noise would be estimated. Factors such as annoyance and frustration
'John Shฐฐp v. U.S. Steel Corp.. Docket No. 3615 (Ct. of Common Pleas,
Allegheny County, Pa. 1972).The case was dismissed In 1975 after the Pennsyl-
vania Supreme Court brought a similar case within the scope of workers' com-
pensation. See Hlnkle v. H. J. Haln*. 337 a. 2d 907 (May 1975).
-------
5-40
with unintelligible speech and often-associated social stigma are implicit
in such estimates.
Taken together, court awarded damages and purchase costs suggest that
workers' compensation benefits may be an inadequate estimate of the true
cost of noise-induced hearing loss. Workers' compensation awards do serve,
however, as a minimal measure for direct hearing loss costs.
Other Noise-Related Compensation Costs
Distinct from types of compensation costs for occupational hearing
loss (such as worker's compensation, court awarded damages and purchase
cost) are compensation to workers for indirect effects of noise exposure
in the workplace. One potential effect of excessive noise is an Increase
in the number of industrial accidents due to the masking of warning signals
and an increase in momentary gaps or errors in performance.
The Raytheon study, discussed in Section 5-2.1, also measured the change
in the number of job injuries among workers exposed to 95 dBA and higher
after the initiation of a hearing conservation program. The results
indicate that the number of injuries went down 39$ after the program,
which included the use of hearing protectors.^ The number of job injuries
among workers in the low noise group remained constant after the program.
This finding contradicts the view that hearing protectors Increase the number
of industrial accidents. Thus, a reduction in the number of noise-induced
industrial injuries compensated by the workers' compensation system is a benefit
which may be significant. For the Raytheon population this number was .75 fewer
injuries per worker/ year. Of course, the range of possible injuries and
their compensable value will be variable. As a result, no attempt was
made to quantify these benefits.
'cohen, op. cit, p. 13a, Table 3-
-------
5-M
5.2.3 Cardiovascular/Stress Effects
The major concern over nonauditory health effects from noise arises
from the ability of noise under some circumstances to act as a general,
nonspecific biological stressor. Other than hearing loss, noise is not
suspected of producing any single health problem unique to itself and com-
parable to the vinyl chloride angiosarcomas, the thalidomide birth defects,
or the asbestos mesotheliomas. Rather the effects of noise, if any, are
likely to be distributed over a large number of common individual cardio-
vascular and other maladies whose causation is complex and attributable to
other factors as well. Nonetheless, because, in particular, cardiovascular
diseases are such a massive problem in our society, even if noise were to
increase their frequency or severity by a small percentage in the exposed
population, this would be a very substantial adverse impact. Major cardio-
vascular diseases* account for well over half of all deaths in the United
States, currently somewhat over a million people per year.' They are also,
1
by far, the most frequent cause of permanent total disability in those under
2
65, as measured by Social Security awards.
In our earlier work we presented a hypothesis and a detailed analysis
of the relevant scientific literature on the relationships between noise
exposure, general stress reactions, increased platelet adhesiveness, and
long-term cardiovascular degenerative processes. Our conclusion was that
some contribution of some level of noise exposure to cardiovascular disease
was at least plausible. The reader is referred to our earlier publication
for full exposition.
*Heart attack, stroke, etc.
^National Center for Health Statistics. Vital Statistics. Public Health
Service (1969).
2
U. S. Department of Health, Education and Welfare. Occupational Character
Istlcs of Disabled Workers, by Disabling Condition, P. H. S. Publication
No. 1531. Superintendent of Documents, U. S. Government Printing Office,
Washington, D.C. 20460 (I967).
3EPA 550/9-76-007,
-------
5.2.4 Annoyance as a Social Cost
That noise is, to some degree, a net overall annoyance to industrial
workers must be considered reasonably beyond dispute. By and large, it
must be supposed that workers exposed to industrial noise in the range under
discussion consider it, on balance, unpleasant or annoying. This depression
of their quality of life is clearly a social cost. To the degree that
workplace noise regulations may reduce this social cost, the reductions
should enter into an assessment of the overall costs and benefits of these
- |
social policies. In our earlier work we offered some procedures for
arriving at an approximate monetary valuation of the reduction in annoyance
produced by particular noise regulations. Unfortunately, to this date we
have not had time to update these calculations using current BBN data on
estimated noise exposures.
'epa 550/9-76-007.
-------
5-43
NOTE TO SECTION 5 ON
DISCOUNTING NON-MONETARY BENEFITS
The purpose of this note is to address the problem of "discounting"
hearing conservation benefits. There are three different approaches to the
discounting of non-monetizable benefits:
discount hearing conservation benefits at the
same discount rate used in the monetary benefit
or cost calculations;
discount the hearing conservation benefits but
at a lower discount rate than that used in the
monetary benefit or cost calculations;
do not discount hearing conservation benefits
at all.
The first approach would apply the traditional present discounted
value criterion (see Section 4.1) to non-market items. The approach has
the advantage of allowing parallel treatment of all costs and benefits.
If the discount rate is 7%, then one year of hearing impairment
prevented today would be equivalent to 1.4 years of hearing impairment
prevented in five years, or two years of hearing impairment prevented in
10 years, or 7.7 years of hearing impairment prevented in 30 years.
Thus, any positive discount rate would value one year of hearing impairment
saved in an early year higher than one year of impairment saved in later
years.
The second approach would allow for discounting of non-monetizable
benefits, but at a lower discount rate. This approach can be defended in
terms of a belief that certain amenities, such as hearing, become more valuable
relative to other goods in this society as time passes and the standard of
living improves.
-------
5-kk
where:
The following relationship would separate the factors affecting the present
value of hearing impairment prevented:
x(l + e)n
(1 + r)n
x = metric expressed in years of hearing
impairment prevented
e = increase in value of hearing
impairment prevented
r = discount rate
For small values of r and e, this is equivalent to:
x
(1 + r - e)n
Thus, the "effective" discount rate (r-e) will be less than the discount
rate used for monetary benefit or cost calculations.
The third approach would not discount non-monetizable benefits.
This result can be reached through any of three pathways.
First, there is a question of the appropriateness of applying a
discount rate to consequences of an action which has significant effects
on future generations.* Clearly, any positive rate of discount will dis-
criminate in favor of choices that involve adverse impacts on later gene-
rations but not on earlier ones. Because the benefits of noise control
extend beyond the costs of the current generation, a similar situation is
presented. If the decision-maker is concerned with intergenerat tonal
equity then an argument could be made that the appropriate social rate of
discount is zero (0).**
*A complete adoption of this argument might not allow for discounting of
costs where the benefits are received currently and the costs are incurred
in later generations. For a more complete discussion, see National Academy
of Sciences, Decision Making for Regulating Chemicals In the Environment.
Appendix H, p. 177
**See Schulze, W. (197*0, "Social Welfare Functions for the Future",
American Economist 18(1): 70-81; Page, T. (1975), Equitable Use of
the Resource Base, unpublished paper.
-------
S-hS
Secondly, the issue of monetizing the value of human life or health
and the issue of whether or how to discount non-monetary benefits are not
strictly separable issues. Discounting non-monetary benefits is a back-
handed way of attaching monetary characteristics to non-monetary goods.
Implicit in discounting is the notion that the goods at any one time can
be traded off for equivalent goods at another time. In reality, few markets
exist for this direct trade. The market exists only through the monetary
exchange system which has a pathway which is clearly subject to the discount-
ing process.
Finally, the "benefit" of removing a person now from risk of
future damage, which is irreversible, inevitable and non-arrestable
once the risk exposure occurs, can be viewed as a present benefit--
and quantified, for example, as the benefit of removing those presently
at risk from future harm.
We chose not to apply a discount rate for hearing conservation
benefits, not because we are certain that it should be zero, but because
we believe the decision-maker should resolve the question himself. To
aid in this exercise, we present the time flow of benefits. Figure 5-8
is a graphical analysis of when the years of hearing impairment prevented
would occur.* This presentation will facilitate the discounting of
hearing conservation benefits should the reader decide discounting (and
at what rate) is appropriate.
*Figure 5-8 is an adaptation of Figure 5*1 and Figure 5.2 of the Main Report.
-------
&
0
*
Q)
3
o
3
"O
o
o
o
o
Nh
mtl-
4) -c a
O J h (J E
c u o
4) U u
c i) -a
u - *-> c t-
ftj u o
-------
6. COST/BENEFIT
In the two previous sections we have made various estimates of the
magnitude of different kinds of costs and benefits. In this section we
bring the two sides of the analysis together in order to help clarify the
relationship between the costs expended by firms on noise control and the
benefits accruing to workers and firms under different compliance scenarios.
6.1 Cost/Benefit comparisons excluding all benefits except hearing conser-
vation.
For simplicity we shall make some initial incomplete comparisons among
compliance scenarios utilizing only the hearing conservation benefits ex-
pressed as person-years of impairment over 25 dB. As has been covered
earlier, the number of person-years of impairment over 25 dB is not a
complete measure of total hearing conservation benefits but It can serve here
as an approximate index for purposes of illustrating the types of comparisons
which can be made.
Figure 6.1 is from the cost section (Section k), and shows the discounted
before-tax costs of compliance of the scenarios for which benefit calculations
have been made. Figure 6.2 presents data from the benefit section within
the same format. Figure 6.3 shows the results of dividing the cost estimates
in Figure 6.1 by the benefit estimates in Figure 6.2. These numbers
represent the dollars expended to save each person-year of hearing impairment
over 25 dB under the different scenarios, relative to the case case of no
change in present exposures.*
The primary conclusion from Figure 6.3 Is that the total cost/benefit
* It is also possible to compute the incremental costs/benefits of going from
one compliance scenario to another. These are:
[Present exposures] to [90 (5 years)]: $790
[90 (5 years)] to [90 (5 years), 85 (10 years)]: $760
[90 (5 years), 85 (10 years)] to [85 (5 years)]: $1,910
[90 (5 years)] to [85 (5 years)]: $900
6-1
-------
6-2
measure used does not differ appreciably for the three compliance scenarios
shown. As a first approximation, therefore, it seems that the cost/
effectiveness for hearing conservation of the noise control expenditures
needed to bring present exposures down to 85 dBA in five or ten years is
similar to the cost-effectiveness of the expenditures needed to bring present
exposures down to 90 dBA.
Another kind of comparison can be made with these data. The ratio of
the benefits of the two-step "90 (5 years), 85 (10 years)" scenario to the
benefits of the one-step "85 (5 years)" scenario is approximately 28 million
person-years/30 million person-yearsor 93% of the benefits of one-step
compliance scenario. On the other hand, the ratio between the cost figures
is somewhat less, $21.2 bi11ion/$25.1 billionor 84% of the costs of one-
step compliance. The difference is not overwhelmingly Impressive, but it
is possible that the delay scenario is worthy of consideration for some
noisy, economically hard-pressed industries where a somewhat larger
proportion of the benefits may be captured for a lower proportion of the costs.
Cost/benefit comparisons of these same types can also be done on an
industry-by-industry basisalthough, because of the possible inaccuracies
in the disaggregated data such comparisons are subject to much larger
uncertainties than all-industry aggregate comparisons. Table 6.1
shows the results of dividing the estimates of costs for each industry
(Table 4.2) by the estimates of benefits for industry (Table 5.4.) for three
compliance scenarios. The data tend to suggest a wide variation in the
relative cost-effectiveness of noise control investments in different
industries. Should such differences persist after confirmation of the under-
lying data, they can form part of the basis for selection of different
compliance scenarios and other noise abatement policies for different
economic sectors. Possible policy options in response to such differences
will be discussed in Section 8 below.
-------
6-3
6.2 Approaches to a more comprehensive cost/benefit analysis
The uppermost line on Figure 6.4 is another presentation of the same
data derived in the previous section. The lower lines indicate how the
analysis changes as cost reductions to firms from absenteeism, tax savings,*
and additional types of benefits (cardiovascular/stress effects, annoyance
costs) are brought into the cost/benefit calculus. It is clear that these
additional considerations all take the analysis in the direction of incurring
less cost per unit of benefit borne by the firms.
* It must be remembered that the tax
costs, as might be inferred from the
to governmental entities. Still the
in the net costs which must be borne
savings do not really abolish half the
diagram, but merely re-distribute them
tax savings represent real reductions
by f i rms.
-------
6-k
Figure 6,1
COMPLIANCE SCENARIOS
Compliance
Levels
Discounted Presented Value Cost (Billions of Dollars)
Before Tax Effect
-------
6-5
Figure 6.2
COMPLIANCE SCENARIOS
Compliance
Ley/els
Hearing Conservation Benefits. Expressed in
Millions of Person-Years of Impairment Over
25 dB, During the First Forty Years After
Compliance
-------
6-6
Figure 6,3
COMPLIANCE SCENARIOS
Compliance
Levels
COST BENEFIT ANALYSIS
Hearing Conservation Benefit Only
Dollars per Person-Year of Impairment
Over 25 dB
-------
TABLE 6.1
TOTAL COSTVPARTIAL BENEFIT OVER FORTY-FIVE YEARS
$TotaI
Prevented Person-
Cost
Year Over 25 dB
Comp1i ance Scena r i o**
0
D
F
C
SIC
1NDUSTRY
Present
90 (5yr)
90 (5yr)
85 (10yr)
85 (5yi
20
Food and Kindred Products
0/0
990
1,220
1,400
21
Tobacco Manufacturers
0/0
1,690
2,260
2,680
22
Textile Mill Products
0/0
450
560
660
23
Apparel & Other Textile Products
0/0
0
220
300
24
Lumber and Wood Products
0/0
290
300
330
25
Furniture and Fixtures
0/0
1,760
930
890
26
Paper and Allied Products
0/0
900
510
520
27
Printing and Publishing
0/0
3,160
1,700
1,830
28
Chemicals and Allied Products
0/0
540
520
590
29
Petroleum and Coal Products
0/0
340
340
370
30
Rubber and Plastic Products
0/0
520
470
530
31
Leather and Leather Products
0/0
0
790
1,040
32
Stone, Clay ฃ Glass Products
0/0
740
870
1,010
33
Primary Metal Industries
0/0
484
592
691
3*
Fabricated Metal Products
0/0
1,410
1,030
1,030
35
Machinery, except Electrical
0/0
2,570
1,990
2,020
36
Electrical Equipment 6 Supplies
0/0
2,800
1,880
2,070
37
Transportation Equipment
0/0
1,070
900
960
49
Electric, Gas & Sanitary Services
0/0
1.860
920
9*ป0
ALL
*
INDUSTRY AVERAGE
Based on BBN Oata
0/0
$ 790
$ 760
$840
** See Figure 4.3 for a graphical representation of the lettered compliance scenarios
-------
APPROACHES TO A MORE COMPREHENSIVE
COST-BENEFIT ANALYSIS
COSTS
TO
FIRMS
Discounted
Present 20
Value
Costs
(Billions of
Dollars)
90
(5yr)
85 85
(10 yr) (5yr)
Costs
Hearing Impairment
Costs-Absenteeism Benefits
Hearing Impairment
Costs-Absenteeism - Tax Benefits
Hearing Impairment
Costs-Absenteeism-Tax Benefits
+ Hearing Impairment*Workman's
Compensation Benefits+ Other
Non- Auditory Benefits
ON
I
OO
BENEFITS TO WORKERS
Millions of Person - Years of Hearing Impairment (*25dB) Prevented
Figure 6,4
-------
7. LEGAL ISSUES RELATED TO THE WORKPLACE NOISE STANDARD
7 1 The Feasibility Concept and OSHA Regulation
7.1.1 In The Standard-Setting Context
Within the OSHAct the term "feasibility" is only mentioned once, in Sec-
tion 6(b)(5), which specifies that in setting standards OSHA must
set the standard which most adequately assures, to the extent
feasible, on the basis of the best available evidence, that
no employee will suffer material impairment of health or
functional capacity even if such employee has regular exposure
to the hazard dealt with by such standard for the ฆperiod of his
working life.
In fact, however, the concept of feasibility pervades the decision-making
process in a variety of contexts. The appropriateness of considering feasi-
bility, and the appropriate definition of the term, are important legal matters
currently in issue which have special relevance for the workplace noise standard.
The scope of the term feasibility as used in the Act has been defini-
tively interpreted through caselaw as encompassing both technological and
economic considerations.* The parameters of what "feasible" actually means in
practice have also been specified by the courts. Standards can therefore be
feasible even if:
1) They are financially burdensome to employers,
2) They affect profit margins adversely,
3) They put individual employers out of business
k) They require improvements in existing technologies or the
development of new technologies.
Standards come closer to infeasibi1ity if only a few firms in an industry
*See Industrial Union Department, AFL-CIO v. Hodgson, 499 F. 2d. 467 (D.C. Clr.
1974) and AFL-CIO v. Brennan, 530 F. 2d 109 (3d C i r. 1975). Both cases establish
this point, relying primarily on the legislative history of the OSHAct as justi-
fication for their position.
7-1
-------
7-2
can achieve them or if they drastically change the competitive position of
the industry. They would appear, from the cases, to be infeasible if they
cripple or eliminate an entire industry.*
7.1.2 In Variance Proceedings
The purpose of the variance provisions in the OSHAct Is to impart a
degree of flexibility into the compliance scheme so as to legalize legitimate
reasons for non-compliance in individual cases. In one case, a permanent
variance will be issued when the employer establishes workplace conditions
which are "as safe and healthful" as those specified in regulations, even
though they are different (Section 6(d)). In another case, temporary vari-
ances will be granted when an employer is "unable" to comply (Sections 6(b)(6)
(A) and (B)). Thus, questions of "feasibility" enter into the equation only
with respect to temporary variances.
In a variance proceeding the inability (or infeasibi1ity) to comply
cannot be based on grounds of economic hardship. This fact can easily be
Inferred from the Act, as it specifies only a limited number of acceptable
explanations for non-compliance: unavailability of professional or technical
personnel, materials, or equipment, or lack of time to complete necessary
alterations.
The variance mechanism is important in the noise standard context for
two reasons. First, it provides temporary relief from a "technology-
forcing" standard. As mentioned above with reference to standard-setting, a
standard which effectively demands the development or adapting of new tech-
nologies can be legally "feasible". The variance mechanism makes such a
standard practicable as well, especially during the initial period when
*This discussion is a distillation of the I UP case, the vinyl chloride
standard case, The Society of the Plastics Industry, Inc. v. OSHA 509 F. 2d
1301 (2nd Cir. 1975). and International Harvester Co. v. Ruckelshaus 478 F. 2d
615 (D.C. Cir. 1973)ป which considered the competitive climate in the auto-
mobile industry and its effect on the feasibility of air pollution standards.
-------
7-3
technological changes must occur. Second, the criteria for granting variances
indicate that although "feasibility" considerations in OSHA decision-making
go beyond the standard-setting context, economic feasibility need not contin-
ually be taken into account. Once the initial economic feasibility of the
standard is established, this argument is not, at least with respect to
variances, an acceptable excuse for non-compliance.
7-1.3 In Abatement Agreements
Abatement agreements are generally entered into by OSHA and a company
after that company has been cited for violation of a standard. This procedure
derives from Section 9(a) of the OSHAct which specifies that the citation
establish a "reasonable" time for abatement. Violations of such agreements
can be assessed penalties under Section 17(d) of not more than $1,000 per day.*
The issue of feasibi1ity--both economic and technologicalarises in
abatement agreements by virtue of the requirement that their time period be
reasonable. Evidence concerning the economic hardship represented by a
certain abatement schedule isปthus, admissible in Review Commission hearings
contesting the appropriateness of the abatement schedule specified in a
citation. (This fact was agreed to by all the commissioners in the recent
Review Commission decision dealing with economic feasibility in citations,
Continental Can--see discussion below.)
The fact that economic considerations may be taken into account in
fashioning abatement periods is important for the noise standard in the
following ways. First it provides an additional mechanism by which to miti-
gate hardships on an individual employer basis. Moreover, abatement
Variations on this basic theme also occur. For instance, the much-publicized
American Can abatement agreement (April 1974) was a stipulated settlement
of three citations which were contested by the company. OSHA in that case
agreed to refrain from further action on the citations in exchange for the
promise to reduce noise exposure. Another noise reduction arrangement was
made on a national level between OSHA and the National Concrete Masonry
Association, under which compliance with the standard was to be achieved by
December 31, 1976.
-------
1-b
agreements, especially those implemented on a national industry level, may be
a particularly useful tool in combination with an industry-specific standard.
7.1.^ in Citation Contests: Continental Can and the Feasibility of
Engineering Controls for Noise Abatement
Both the current and proposed noise standards call for engineering con-
trols as the primary means of compliance, except to the extent that such
controls are not feasible, in which case personal protective equipment will
be permitted. Infeasibi1ity of engineering controls may thus be a good
defense to a noise citation. This question was the primary point in issue in
the recent Continental Can litigation (4 OSHC 15^1). Continental Can was
cited for violation of the noise standard and pleaded in its defense:
1) That even if engineering controls were installed on all cited
machines, the factory noise levels would still not be within
allowable limits and that therefore it should be relieved of its
responsibility to institute engineering controls at all and
allowed instead to use hearing protectors exclusively;
2) Even assuming engineering controls were required to reduce noise
as far as possible, they were infeasible in this case due to their
excessive cost; and
3) The burden of proof was in any case on OSHA to establish both
technological and economic feasibility.
The Commission ruling in this case, if upheld on appeal, will have
important implications for the design of the noise standard and its enforce-
ment. First, it should be made clear that the decision in no way eliminates
the duty of the employer to implement engineering controls fi rst to the
extent that they are feasible even though such controls cannot reduce noise
levels sufficiently. Protective devices are still to be considered a second
resort. The most novel aspect of the case, however, is its holding that
economic factors are to be taken in account in reaching a determination as
to the feasibility of engineering controls. The majority commissioners argue
for this posture based largely on the IUD case (discussed above) which
allowed economic factors to be considered in setting feasible health and
safety standards. Their position is that "feasible" when written into a
-------
7-5
promulgated standard should be interpreted just as it has been when written
into the Act. The dissent in the case argues that "feasible" as used in a
duly promulgated standard only means technical, not economic, feasibility and
that Congress did not intend citation contests to be a case-by-case economic
impact assessment. The last important holding in the case was that the
burden of proof was on OSHA to establish both economic and technical feasi-
bility of engineering controls. (This point was objected to by the dissent
as wel1.)
Going beyond the Commission's determination of legal principles, it is
important to consider its factual findings as to feasibility. In Continental
Can, engineering controls were found infeasible on the following uncontradicted
evidence introduced by the company: $32,000,000 capital expenditure to reduce
all plants' noise levels to 90 dBA via engineering controls vs. $100,000 to
do so via personal protective devices.* By way of contrast, In another
decision (Carnation Co. 0SHRC Docket No. 8165, November 25, 1975) engineering
controls were deemed feasible at a cost of $2.1 million when annual net
income of the company was $79-6 million. The mode of decision-making specified
by the Commission to reach such decisions is an analysis in which "all the
relevant cost and benefit factors" are weighed, taking care to distinguish
between hazards such as noise which are not 1ife-threatening and other
hazards which might be.
If Continental Can remains good law on appeal, it is clear that OSHA
must devise methods to meet its burden of proving the economic and technical
feasibility of engineering controls. This may perhaps best be accomplished
on an industry rather than on a firm level. Feasibility on an industry
level can be established:
1) by setting industry-specific standards supported by solid
cost data, and
2) by negotiating industry-wide abatement agreements such as that
concluded with the Concrete Masonry Association.
*The company did not claim that a $32 million expenditure would "seriously
Jeopardize its financial condition." This is currently the only grounds
allowed In the OSHA Field Operations Manual for considering economic cost.
-------
7-6
Given the fact that various court cases have specifically stated that a
feasible standard may be burdensome or put individual employers out of busi-
ness, the determination of feasibility for an industry taken as a whole may
go far toward shifting the burden of proof from OSHA in individual cases.
7.2 Industry-Specific Standards
The option of drafting OSHA workplace noise requirements in an industry-
specific manner has been considered by*OSHA and generally advocated by EPA
throughout the examination of the proposed noise standard. Nevertheless, this
option has been less than thoroughly analyzed thus far. There are essentially
three ways by which the problem of differentiating among industries could
be approached. First, the mandated noise level itself could vary according
to industry, e.g. 90 dBA for some SIC codes, 85 for others, 80 for others,
etc. Second, a single uniform standard could be promulgated, but industry
compliance time scenarios varied, e.g. an 85 dBA standard with 1, 2, 5, 10, or 15
year compliance periods, depending on the industry. Lastly, the mode of
compliance could vary by Industry. For example, exclusive use of engineering
control might be required for some industries and hearing protectors allowed
to varying degrees in others, depending on the feasibility of engineering
controls. The legality, desirability, and practicality of these options
will be the subject of the following analysis.
The basic legality of industry-specificity in standard setting is well
established, both in the OSHA context and in other regulatory systems. In
addition, its feasibility is demonstrated by current practice. EPA has, for
example, promulgated many industry-specific requirements in both the air and
water pollution areas. Differentiation among industries will also be the
basis for energy-use reduction requirements authorized by the 1975 Energy
Policy Conservation Act. Even OSHA has in the past employed this approach,
as illustrated by its Occupational Safety and Health Standards for special
industries: paper pulp, textiles, bakeries, laundries, telecommunications,
etc.*
*See 29 C.F.R. Chapter XVII, Parts 1910, 261-275.
-------
7-7
Although these examples attest to the general feasibility of regulating
industry by industry, they do not bear close analogy to the noise situation
to the extent that they concern different hazards in different industries.
The closest resemblance to the noise casea single hazard pervasive across
industriesis posed by the asbestos standard set by OSHA. The industry
difference problem was addressed head-on by the court in the challenge to that
standard (I UP, supra). One of the points in issue concerned the effective
date of the regulation--which was to be uniform for all industries. OSHA had
promulgated a 5-ftber standard for al1 industries which was to be reduced to
2-fibers for all industries after 4 years. Evidence was introduced showing
that many industries could have complied well within the allowable k years.
NIOSH had, on the basis of this evidence, recommended varying standards
depending on industry compliance capability. Nevertheless, OSHA promulgated
a uniform standard, largely for reasons of practical administration.
The D.C. Circuit Court, while upholding the general standards, remanded
for clarification or reconsideration, the part making the standard uniform.
In so doing, it made several very important points concerning industry-
specific standards. First, the court chided OSHA for not seeking out and
introducing more information showing inter- and intra-industry differences.
Second, it maintained that industry-specific standards "would not appear to
create opportunities for employers in one industry to challenge their stan-
dards on the grounds that standards for another Industry were less demanding"
(except if the industries were directly competing). Lastly, the court
refused to accept OSHA's cryptic reference to reasons of practical adminis-
tration as justification for uniformity. Its specific statement on the
subject Is as follows:
It is possible that the Secretary failed to pursue this point because
he interpreted the statute to require a single uniform standard
for reasons of practical administration. If so, we disagree.
The statutory scheme Is generally calculated to give the Secretary
broad responsibility for determining when standards are required and
what those standards should be. If the Secretary determines that
meaningful distinctions between the compliance capabilities of various
industries can be defined, he Is authorized to structure the
standards accordingly.
-------
7-8
It is noteworthy that: to this point in the consideration of the noise
standard OSHA has rejected the option of industry-specific standards for
two reasons: administrative impracticability, and inequitable treatment of
workers in industries with less strict standards. With respect to difficul-
ties in administration, this argument against industry-specificity seems to
have been largely disposed of by the IUD case, unless OSHA soon compiles
detailed evidence to substantiate its claim on this point. Given the paucity
of analysis performed to date concerning this option, one might even argue
that is is legally incumbent upon OSHA to consider industry-specific standards
ฆjck
more fully.
With respect to the equity or unequal treatment problem, a variety of
issues deserve further mention. The problem of unequal treatment of employers
in various industries which arises as a result of an industry-specific
standard was addressed directly in the case of the asbestos standard. The
court's statement on this point is quoted above. Although the court clearly
approved such an approach, one industry-specific standard which concerned it
was the effect on competition which such a standard might create. Reference
was made, however, to other major cases*** which found competitive problems
of this sort generally applicable at the intra- rather than inter-industry
level. In the OSHA context, it has been maintained previously, hardships on
the intra-industry level may be dealt with by a variety of means (e.g. vari-
ances, abatement agreements). Thus the competition issue (on either an Intra-
or inter-industry level) should not be a pressing concern. The IUD court said
as much:
**~0 Fed. Reg. 12366 (March, 1375).
**Without such analysis OSHA faces a formidable legal challenge to its standard
and potential remand 1) on the basis of the I UP remand in a similar situa-
tion, or 2) on the basis of NEPA (and CEQ and DOL implementing regulations)
which calls for a "detailed assessment of alternatives." A beginning toward
industry-by-industry analysis and establishing the "meaningful distinctions"
between industries is, however, made by the BBN analysis and the CPA work
considering cost and compliance capabilities according to 19 SIC code industri
***International Harvester Co. v. Ruckelshaus 478 F. 2d 615 (D.C. Cir. 1973)
and Portland Cement Association v. Ruckefshaus, 486 F. 2d 375 (D.C. Cir. 1973)
-------
7-9
The only relevant question [in a challenge by employers in one
Industry] would be whether the time schedule established for
each industry would be feasible for that Industry; therefore,
comparisons with . . .a different industry would be pointless
unless the two industries were in competition with one another.
Similarly, the legal problems created by workers in one industry com-
plaining of unequal treatment from an industry-specific standard do not appear
especially severe. One could simply apply the court's reasoning in IUD
concerning emp1oyers to the employees' context, and this might prove a
sufficient answer. Moreover, if in answer to such complaints OSHA were to
set a uniform, less protective standard rather than one which is selectively
strict according to industry compliance capability, its action would in this
case be open to characterization as equally unprotective treatment for all.
It is, therefore, entirely possible (given the wide variation among indus-
tries) that an industry-specific standard, drafted according to considerations
of individual industry feasibility, could be, in the aggregate, more protec-
tive of workers than a single uniform standard which would, legally, have to
meet the feasibility test with respect to the lowest common denominator of
ฆk
industries.
A last "equity" question to be considered is the efficient allocation
of resources to effectuate mandated social goals. Put more concretely, if
the goals of general economic feasibility and worker protection are both
present in the OSHAct, the most efficient way to achieve them both may be to vary
the mandated levels of noise protection (beyond a certain oiinimum which
should be universal) according to the feasibility of achieving greater levels
of protection. In short, it may be most "equitable" to impose very strict stand-
ards for industries capable of meeting them economically feasibly.
*The Constitutional problems of equal protection which might arise in this situ-
ation are not especially troublesome. The appropriate test to be applied
would be whether there were a rational basis for distinctions among industries.
The stricter justification for legislative action, "compelling governmental
interest" Is only applied where there Is a "suspect" classification (industry
differences are not) or where a "fundamental right" is'Involved. If workers'
(or public) health were to gain Judicial recognition as a fundamental right,
an Industry-specific standard which In effect granted unequal treatment might
be forbidden, but this Is not the present state of the law.
-------
7-10
7. 3 Cone 1 us i ons
It is apparent that the discussion to date concerning industry-specific
standards has been deficient in its depth and seriousness. OSHA's examina-
tion of this alternative has been rather cursory and its reasons for rejec-
tion conclusory. A fuller consideration of this option is clearly required
by existing legal authority: 1) NEPA and its implementing regulations, which
unambiguously outline the alternatives section of an impact statement and 2)
the Industrial Union case, which held that industry-specificity in health
standards must be explored before a uniform standard can be set. Part of
this analysis has been attempted in this report.
Moreover, on the basis of the OSHAct itself, past agency actions under
it, and the relevant caselaw, it appears that OSHA has perfect legal compe-
tence to promulgate regulations in the industry-specific form. The
Industrial Union case made it clear that an inequity in treatment of different
industries is not a legal impediment; and administrative difficulty is
similarly not a persuasive legal argument without some data to support this
assertion. Moreover, the existence of a group of industry-specific standards
currently In force attests to both the legality and practicability of this
option.
This being the case, the key to the analysis of industry-specific
standards is whether "meaningful distinctions" exist among industries suffi-
cient to justify different basic standards, different compliance periods, or
different modes of compliance. The distinctions which must exist essentially
concern the "feasibility" of stricter standards for some. Thus, to quote
the IUD court, the final "relevant question" is feasibility.
The feasibility of differing compliance scenarios according to industry
has In part been demonstrated by the earlier analysis in this report. The
problem of feasibility of compliance on a firm-by-flrm basis (a consideration
necessary If the Continental Can decision Is upheld) has yet to be satisfac-
torily resolved.
Part of the solution to the individual firm feasibility problem lies In
sound use of existing mechanisms allowing regulatory flexibilityvariances
and abatement agreements. The solution to the additional problem of OSHA's
-------
7-11
legal burden to prove such feasibility on a case-by-case basis may again lie
in an industry-level approach. If feasible industry-specific standards are
promulgated and upheld, and if feasible abatement agreements or industry-
level abatement guidelines are adopted, the effective burden of proof may
shift from OSHA to firms to prove that their case is compelling enough to
warrant an exception to the general Industry rule.
7.*ป Ethyl Corporation v. EPA
The Ethyl Corporation litigation was a contest of the regulations by
which EPA sought to reduce lead content in gasoline. The case has major
significance for environmental or health regulatory agencies in general, but
It is of more limited relevance with respect to the OSHA workplace noise
standard. The primary Issue in Ethyl Corp. was the authority of EPA to
regulate when such action was based only on a finding that lead additives
represented a "significant risk of harm" rather than on proof of actual harm.
(The statutory direction in the Clean Air Act allows the agency to control
or prohibit fuel additives which "will endanger the public health or welfare.")
The D.C. Court of Appeals upheld EPA's action, affirming its right to take
preventive measures based on its assessment of risk even in a situation
where conclusive factual findings were difficult If not Impossible to obtain
due to the scientific uncertainties surrounding the issue. A second
important point in issue was whether EPA could justifiably regulate the lead
content in gasoline even though the lead additives increased the potential
harm only Incrementally In that other sources of lead presumably contributed
the major portion of human exposure. Again, EPA's authority in this regard
was confirmed.
In an important respect the Ethyl Corp. situation does not bear close
analogy to workplace noise control, since In the latter case the adverse
effects of noise exposure on hearing are relatively well documented and
understood. (On the other hand, when considering the non-auditory effects
of noise, the question of an agency's authority to guard against uncertain
potential harm Is certainly cogent.) However, the issue of cumulative
detrimental effect, the second major point In Ethyl Corp., Is significant
in the noise context. The clear message of Ethyl Corp. is that regulatory
-------
7-12
agencies have the responsibiUty to reduce to the extent feasible those
hazards which fall within their jurisdiction even though there may be signi-
figant causative factors which lie beyond their control. With respect to
the noise standard, this point is relevant to the problems of presbycusis and
especially sensitive individuals. The Ethyl Corp. rationale would seem, in
these contexts, to indicate that OSHA may design its standard so as to
prevent in unusually situated individuals a cumulatively Induced handicap,
irrespective of the fact that the workplace exposure may only represent an
incremental addition to the handicap's causation.
-------
8. POLICY ISSUES AND A CHOICE OF COMPLIANCE SCENARIOS
8.1 Recapitulation of Findings
Although there are uncertainties in the underlying data and there
are major methodological flaws in the BBN cost analysis, we believe
that we have demonstrated that a proper methodological treatment
yields (after-tax effects) costs of the same magnitude. Furthermore,
we believe that the BBN estimates do provide a rational basis for the
adoption of an occupational noise exposure regulation.
An analysis of the compliance costs of an industry-by-industry basis
tends to suggest a potential wide variation among industries in the
economic burden to comply with a 90 dBA or an 85 dBA standard. This
variation could form part of the basis for meaningful distinctions
among industries in selecting different compliance scenarios. However,
in order to provide a rational basis for setting an industry-by-industry
standard (should that be desired) the BBN cost estimates need to be
confirmed and adjusted, where necessary.
The magnitude of the effect that discounting has on compliance costs
and the practical considerations making immediate compliance not
feasible, suggest the consideration of alternative compliance scenarios
with different time-phasing for compliance.
It is likely that about half of the net costs of the regulation on
industry will be borne indirectly by governments in the form of tax
reductions.
The BBN estimate of noise exposure in individual industries must be
regarded as highly preliminary and subject to error. Properly inter-
preted, however, they can: (1) form the basis for assessments of
the overall hearing conservation benefits likely to be produced by
compliance with different noise regulations under different assump-
tions, and (2) give some Indication of how much the hearing conserva-
tion benefits of noise control may vary among industries. The data
for specific industries need to be critically assessed, however.
8-1
-------
8-2
* Ultimate Equilibrium Flow of Benefi ts
If present exposures remain unchanged, approximately 1.9 million
workers will experience hearing levels above 25 dB due to indus-
trial noise at any one time (after subtraction of the workers who
wiH be over 25 dB due to presbycusis alone). The implementation
of a 90 dBA standard will reduce the number over 25 dB by about
770,000 and the implementation of an 85 dBA standard will reduce
the number over 25 dB by about 1,350,000.
Of this hearing impairment over 25 dB which is prevented, approxi-
mately 15% represents hearing impairment in the "severe" over 50 dB
category. In addition, the number of people prevented from experi-
encing 20-25 dB hearing levels is approximately one-third as large
as the number of people prevented from experiencing hearing levels
over 25 dB.
Pre-Equilibriuro Benefits of Different Compliance Scenarios
Compliance with a 90 dBA standard within five years will prevent
about 18 million person-years of impairment over 25 dB prior to
equilibrium (at year k$). Compliance with an 85 dBA standard
within five years will prevent about 30 million person-years of
impairment over 25 dB in the same time period. A two-step com-
pliance scenario with compliance to 90 dBA within five years and
compliance to 85 dBA within ten years will prevent about 28 million
person-years of impairment over 25 dB prior to equilibrium.
* Wooer's Compensation
The total potential savings in worker's compensation benefits that
will accrue from either a 90 or 85 dBA standard are small ($,28
billion and $.53 billion, respectively) when compared to the capital
and maintenance costs of compliance. It is clear that the savings
from the worker's compensation payments alone cannot serve as an
adequate economic incentive for industries to voluntarily reduce
the level of noise exposure in the workplace.
-------
8-3
Absenteei sro
The benefits of prevented absenteeism are substantial. For the
90 dBA standard with a five-year delay, the expected benefits are
$3-9 billion and for 85 dBA, $6.3 billion.
Other Benefits (reduction in cardiovascular disease processes,
and in annoyance) are plausible and, though of uncertain magnitude,
must be included in any complete assessment of benefits.
Cost/Benefit
Cost/benefit comparisons excluding all benefits except pre-
equilibrium hearing conservation indicate that:
-- Cost/effectiveness for hearing conservation of the noise control
expenditures to reach 85 dBA in five years is similar to the
cost/effectiveness of the noise control expenditures needed to
reach 90 dBA in five years. For the 85 dBA regulation, $840
present value would be spent to prevent each person-year of
impairment over 25 dB, and for the 90 dBA regulation ง790
would be spent for each person-year over 25 dB prevented.
-- The "two-step" scenario (compliance with 90 dBA in five years,
compliance with 85 dBA within ten years) has a slightly better
cost/benefit ratio ($760/person-year over 25 dB prevented) than
the other scenarios.
-- The data tend to suggest wide variation in the cost/benefit
ratios for the different compliance scenarios in different
industries.
Inclusion of absenteeism benefits, tax benefits, worker's compen-
sation and other non-auditory benefits, all move the cost/benefit
ratio in the direction of providing more benefits to workers at
lower costs to firms.
-------
a-Jt
8.2 Identification of the Issues in Conflict
There are Important technical issues in conflict such as the defini-
tion of material impairment, the time-intensity trade-off rule, and the
data most suitable for quantifying the relationship between noise expo-
sure and hearing impairment. However, controversy surrounding these
Issues tends to obfuscate the more basic policy-determining questions.
The basic issues are:
the extent to which OSHA should, under its mandate, impose
costs on industry and society in order to benefit workers,
the choice of time frames for compliance,
the mix of engineering controls, administrative controls,
hearing conservation programs, and
the desirability of Industry-specific standards.
It is hoped that this writing has helped to distinguish the technical and
scientific bases for policy choices from the legal, economic and prac-
tical bases.
8.3 Discussion of the Basic Issues
The Extent to which OSHA shouId, under -its mandates impose Costs on
Industry and Society in order to benefit Workers
Since there would be substantial hearing loss in the work force
with either a 90 dBA or an 85 dBA standard, there is a firm evidentiary
basis for OSHA, under its mandate, to promulgate an occupational noise
exposure regulation.* The technological feasibility of using engineering
controls to achieve the proposed alternative standards has been emphasized
by BBN, although some industries may need to supplement those controls
by other compliance methods during the initial phase of compliance.
Economic feasibility remains a thornier Issue.
OSHA would be well-advised to pursue cost-effective means of Imple-
menting a noise regulation,and the directive for an Inflationary Impact
#0n the benefit side, there may be Justification for adoption of an
even lower noise exposure level.
-------
8-5
statement does require an analysis of the economic effects of a pro-
posed standard. However, a cost-benefit analysis is neither the required
nor most desirable approach for policy guidance. Cost-benefit analysis
is inappropriate for dealing with issues comparing incomensurables such
as workers' hearing and capital costs-(See section 2). The fear of the
Council on Wage and Price Stability that costs of regulation will far
exceed the benefits is inappropriately put. The costs can not be
directly compared to the benefits since there is no theoretically correct
way to monetize all the benefits of hearing conservation. The issue is
whether the costs are justified by the benefits (See section 5 for dis-
cussion of the appropriate quan!fication of benefits). Our earlier
presentation of costs and benefits (derived from a proper treatment of
the data contained In the inflationary impact statement) do indicate
that a noise regulation for industry as a whole is justified. The exact
form of the regulation will be discussed in the subsection entitled,
"The Choice of Compliance Scenarios".
The Choice of Time Frames for Compliance
We have shown that a slight delay in compliance times will reduce
the firm's effective costs of compliance and not be very harmful to
workers (See Figures 4.3 and 5*6). In addition, a delay in compliance
may allow new technology to develop In the noise control field and in
severely noise-impacted industries. Thirdly, delaying the compliance
period will allow a firm more flexibility in obtaining the necessary capital
funds, accoustical materials, and technical expertise needed for compliance.
At the same time, the dangers of a delayed compliance scenario must be recog-
nized, particularly delays by those firms lacking good faith. A two-
step scenario(which mandates interim compliance with a noise level higher
than the final level requI red)should be seriously considered in cases
where a one-step, but lengthy delay scenario would appear to be more
-------
8-6
cost-effcctive.* (See further discussion in the section entitled, "The Choice
of Compliance Scenarios".)
The Mix of Engineering Controls,, Administrative Controls3 and Hearing
Conservation Programs
The mixture of engineering controls, administrative controls, and
personal hearing protectors, must be most carefully addressed. The
success of a variety of types of engineering controls is fairly well-
documented. However, the success of administrative and personal
1 2
hearing protection approaches is seriously questioned ' . In indus-
trial field conditions.it was revealed that the field-tested ear plug
did not offer the protection indicated in the available literature.'
We are not unmindful of some evidence that indicates success; we merely
wish to point out that the reliability of this form of noise control is
highly uncertain and varies with the particular case. In another recently
published report by NIOSH entitled "A Survey of Hearing Conservation
2
Program# in Industry" , it was revealed that administrative controls
had seldom been used with much success. Here too we find that the
reliability of a noise control measure other than engineering controls
depends very much on the particular program. It must be recognized
that "feasibility" (required by the OSH Act) must not only refer to
feasibility of engineering controls, but also the feasibility of hearing
protectors being effective. A more expensive but reliable engineering
^Abatement agreements providing long time periods for compliance have met
with mixed success (Bureau of Natural Affairs Inc., Occupational Safety
and Health Reporter, vol. 6, no. 14, p. 402, September 2, 1976). If, after
claiming to have done all within its power, a firm concludes it can not
comply and has done nothing, no disciplinary action appears to be possible
under the law. Therefore unless compliance activity can be effectively
monitored,only short delays between interim compliance steps seem to be
justified for either abatement agreements or compliance scenarios.
lM. Padi11a, "Ear Plug Performance in Industrial Field Conditions", Sound
and Variation (May 1976), pp.33-6.
2M.E. Schmidek et. al., Survey of Hearing Conservation Programs in Industry,
NIOSH No. 75-178, June 1975-
-------
8-7
control may be preferable to a cheap but unreliable hearing protection
approachif the latter's feasibility is highly uncertain. It is worth
pointing out that in the N10SH study mentioned above, 80% of the hearing
test facilities failed to meet the ANfi criteria for audiometer perform-
ance or limits for background noise levels.'
The Desirability of Industry-Specific Standards
There appears to be a rational basis for setting industry specific
standards should that be desired. In Tables 8.1, 8.2, and 8.3, we com-
pare the benefits, costs, and costs per benefit for three different com-
pliance scenarios on an industry basis. Should the policy maker wish to
derive the maximum hearing protection per dollar expended by industry,
he may wish to impose different burdens on the different industries. The
criteria for this undertaking may include health, economic, and technolo-
gical factors. On the health side it must be recognized that solutions
which may not be health-effective approaches in the long term (e.g. hearing
protectors or some administrative controls)may suffice for an interim period.
This would lessen compliance costs for the firm and encourage better techno-
logical solutions in the long run. Both costs, "profitability", and cost/
benefit data should be considered on the economic side. The possible promulgation
of machinery standards (by EPA), the availability of government assistance
in Research and Development and possibility of technological innovation enter
into the technological factor.
8.4 External Factors Which Hay Ultimately Bear on a Choice
of Compliance Scenarios
Before discussing a choice of compliance scenarios, three additional
factors important for ultimate policy formulation will be discussed.
'ibid.
-------
8-8
Table 8. I
COMPARISON OF BENEFITS, COSTS AND COST/BENEFIT FOR
COMPLIANCE SCENARIO 90(5 year)
SIC INDUSTRY
20
Food and Kindred Products
2\~
Tobacco Manufacturers
21
Textile Mill Products
23
Apparel 6 Other Textile Products
Zk
Lumber and Wood Products
25
Furniture and Fixtures
26
Paper and Allied Products
27
Printing and Publishing
28
Chemicals and Allied Products
29
Petroleum and Coal Products
30
Rubber and Plastic Products
31
Leather and Leather Products
32
Stone, Clay 6 Glass Products
33
Primary Metal Industries
3*i
Fabricated Metal Products
35
Machinery, except Electrical
36
Electrical Equipment 5 Supplies
37
Transportation Equipment
*9
Electric, Gas ฃ Sanitary Services
*Noise-induced hearing impairment over 25
**Total discounted compliance costs over
***Cost in dollars per prevented person-yi
BENEFITS*
COSTS**
COST/BENEFIT***
.783
777
990
.036
61
1,690
3.^7
1,560
450
.017
0
0
3.29
945
290
.277
480
1,760
.300
270
900
.201
635
3,160
.766
412
540
.702
236
340
.296
155
520
O
o
-fc-
0
0
.309
230
740
3.89
1,884
484
1,25k
1,762
1,410
1.147
2,951
2,570
o
o
196
2,800
.846
905
1,070
.417
777
1.860
$ 790 (ALL
INDUSTRY AVERAGE)
8 over4i>>yeซr*ซ^in
-------
8-9
Table 8.2
COMPARISON OF BENEFITS, COSTS AND COST/BENEFIT FOR
COMPLIANCE SCENARIO 90(5 year), 85(10 year)
SIC
INDUSTRY
20
Food and Kindred Products
2!
Tobacco Manufacturers
22
Textile Mill Products
23
Apparel & Other Textile Products
2k
Lumber and Wood Products
25
Furniture and Fixtures
26
Paper and Allied Products
27
Printing and Publishing
28
Chemicals and Allied Products
29
Petroleum and Coal Products
30
Rubber and Plastic Products
31
Leather and Leather Products
32
Stone, Clay ฃ Glass Products
33
Primary Metal Industries
34
Fabricated Metal Products
35
Machinery, except Electrical
36
Electrical Equipment & Supplies
37
Transportation Equipment
49
Electric, Gas & Sanitary Services
BENEFITS" COSTS** COST/BENEFIT***
1.418
1,730
1,220
.050
113
2,260
4.78
2,700
560
.058
13
220
4.46
1,327
300
.602
560
930
714
365
510
N
CM
r^.
1,224
1,700
1.316
689
520
.917
310
340
.570
268
470
.011
9
790
.'~76
416
870
5.42
3,211
592
1.92
1,983
1,030
1.757
3,501
1,990
.208
391
1,880
1.373
1,234
900
1.221
1,128
920
$ 760 (ALL
INDUSTRY AVERAGE)
*Noise-induced hearing impairment over 25 dB over45/years-in mUHdns;:of person-years.
**Total discounted compliance costs over 45 years (millions of dollars, present value)
Ai'tftCost in dollars per prevented person-year over 25 dB
-------
8-10
Table 8.3
COMPARISON OF BENEFITS, COSTS AND COST/BENEFIT FOR
COMPLIANCE SCENARIO 85 (5 year)
SIC INDUSTRY BENEFITS* COSTS** COST/BENEFIT***
20
Food and Kindred Products
1.551
2,264
1,400
21
Tobacco Manufacturers
.053
142
2,680
22
Textile Mill Products
5.03
3,339
660
23
Apparel & Other Textile Products
.068
20
300
2k
Lumber and Wood Products
4.66
1,541
330
25
Furniture and Fixtures
.676
602
890
26
Paper and Allied Products
.807
419
520
27
Printing and Publishing
.851
1,555
1,830
28
Chemicals and Allied Products
1.429
845
590
29
Petroleum and Coal Products
.955
351
370
30
Rubber and Plastic Products
.630
331
530
31
Leather and Leather Products
.013
14
1,040
32
Stone, Clay & Glass Products
.513
520
1,010
33
Primary Metal Industries
5-72
3,954
691
3^
Fabricated Metal Products
2.05
2,109
1,030
35
Machinery, except Electrical
1.885
3,812
2,020
36
Electrical Equipment & Supplies
.242
500
2,070
37
Transportation Equipment
1.482
1,419
960
^9
Electric, Gas & Sanitary Services
1.412
1,325
940
$ 840 (ALL
INDUSTRY AVERAGE)
*Noise-induced hearing impairment over 25 dB over 45 years In millions of personryears
**Total discounted compliance costs over 45 years (millions of dollars, present value)
***Cost in dollars per prevented person-year over 25 dB
-------
Tax Alternatives
In our calculation of the costs associated with the workplace noise
standard (Section k.\), we discussed the after-tax impact of the capital
and maintenance costs for purchases of noise abatement equipment. That
discussion assumed that such capital expenditures would in most cases
qualify for two existing tax benefits: the depreciation deduction (Section
167) and the investment? tax credit (Section 38). These benefits, of course,
pass on some of the costs to the government and the general taxpayer
population.
The current tax code provides other benefits to investments in environ-
mental control technologies which are, however, unavailable in the noise
context. These arise from Section I69, which allows rapid amortization of
a "certified pollution control facility". Such facilities are considered
to be plant or equipment installed for the reduction of air or water pollu-
tion.
One alternative to be considered for reducing workplace noise is a
simple amendment to the defitional section of I.R.C. 169 (169(d)) which
would Include noise abatement devices within the meaning of the term
"pollution control facility".* Such an amendment would presumably provide
an additional incentive to firms to make investments in noise control;
however, the size of the increment is not certain given the fact that the
investment credit would then be unavailable. For those particular expendi-
tures, moreover, although the tax mechanism may be efficacious as a policy
tool, it is not clear that as a matter of social policy the shifting of
costs which tax benefits entail is necessarily desirable. One must balance,
*Amendments to Section 169(d):
For purposes of this section
1) The term "certified pollution control facility" means a new
identifiable treatment facility...to abate or control noise
water or atmospheric pollution...
B) the Federal certifying authority has certified...(iii) ae
being in oomplianoe with the Occupational Safety and Health
Act or the Noise Control Act...
3) The term "Federal certifying authority" means...in the case of noiee
pollution the Environmental Protection Agency or the Department of Labor.
-------
8-12
among other things, decreased noise pollution or reduced financial burdens
on small or marginal firms against, for instance, an equally-reduced cost
to large and/or healthy firms which amounts to a public subsidy. No parti-
cular course of action is recommended here, other than a suggestion that
this option may merit further consideration.
EPA Machinery Regulations
The desirability of shifting the burden from firm to the manufacturer
of noisy machinery through a mechanism such as EPA machinery regulation
needs to be considered. (See testimony of Mr. Charles Elkins of the EPA.)
The Desirability of Encouraging Government Intervention
Through Support of Industrial Research and Development
It is Interesting to note that those industries with severe noise
problems are often those with the lowest measures of Research and Develop-
ment intensity. Table 8.4 illustrates the relationship between high noise
levels and low Research and Development expenditures.
Measures of R&D intensity, by industry, 1961-72 Mean over the 1961-72 period
R&D scientists Company funds
& engineers Total funds for for R&D as a
per 1,000 R&D as a percent percent of
Industry employees of net sales2' net sales"
I
Chemicals & allied products 37.5 4.0 3.5
Machinery 25.9 3.9 3.1
Electrical equipment & communications 47.Z 8.5 3.6
Aircraft & missiles 88.6 20.9 3.5
Professional & scientific instruments 33.9 5.9 4.1
Mean for group 1 47.1 8.2 3.5
Civaji II
Petroleum refining & extraction 15.8 0.9 0.9
Rubber products 17.8 2.0 1.7
Stone, ciay &. glass products 10.7 1.6 1.5
Fabricated metal products 12.8 1.3 1.2
Motor vehicles & other transportation
enuipmcnt 19.4 3.3 2.5
Mean for group II 16.4 1.9 1.6
Cm.,.. JIJ
Food & kindred products 7.2 0.4 0.4
Textiles & apparel 3.1 0.5 0.5
Lumber, wood products & furniture 4.7 0.5 0.4
Paper & allied products 8.5 0.9 0.8
Prima, y metals 5.6 0.8 0.8
Mean for group III 6.0 0.6 0.6
- l or further information on R&Din smallcompanies, see
Thomas Hogan and John Chirichiello, "The Role of Research " Total net sales by Group I industries over the entire
fid ' ''vtlopment in Small Firms",in The Vital Majority: SmM 1961-72 period were only 25 percent larger than sales by
Blow* in Ike American Economy, Small Business Administra- industries in Group II and approximately 50 percent larger
1974 than those of Group HI industries.
Source:
Science Indicators 1974, National Science Board 1975.
-------
8-13
It also should be realized that federal support for industrial Research
and Development is lowest in those industries with severe noise problems,
(Table 8.5). Table 8.5
Federal funds as a percentage of
total industrial R&D expenditures, by
industry, 1973
Industry Percent
Aircraft and missiles 78
Electrical equipment &
communication 50
Professional & scientific
instruments 20
Motor vehicles and other
transportation equipment 17
Machinery 16
Rubber products 12
Chemicals and allied
products 10
Fabricated metal products 5
Primary metals 4
Petroleum refining and
extraction 3
Stone, clay, and glass
products 2
Textiles and apparel 2
Food and kindred products 1
Paper and allied products 1
5 Federal support for nonmanufacturing industries
amounted to 56 percent of their total R&D expenditures in
1973.
Source: Science Indicators 197^,
National Science Board 1975-
Thus, the ultimate compliance scenario should reflect the desirability
of encouraging government intervention in the industrial Research and
Development of those industries most severely impacted..
8.5 The Choice of Compliance Scenarios
The form of the standard must reflect not only the best available
technological and scientific information, but must also consider the admini-
strative burdens of setting the standard and enforcing the law. In Section 7
we raised important issues likely to surface in legal challenges to whatever
standard is promulgated and enforced. The challenges may differ as to tech-
nological versus economic feasibility, who proves something as opposed to
what needs to be proved; and whether the challenge is to a broad-based
standard, an industry-specific standard, or to the particular burden placed
on an individual firm.
-------
8-14
The facts would appear' to mandate an ultimate compliance with an 85 dBA
standard in all industries.
Considerations of both costs and readability support the preference of
engineering controls as the primary compliance strategy, supplemented by
personal hearing protectors and some administrative controls (such a:; the
running of night or weekend shifts) in the interim phase of compliance.
Some industries may be harder hit. Government policies favoring further
cost-sharing by society through tax changes and government participation
in research and development should be considered if engineering controls
impose a particularly severe burden on a substantial number of industries.
A slight delay in compliance time (less than five years) is probably
inevitable. If a longer delay is deemed desirable, the standard ought to
require compliance with an 85 dBA standard in no longer than 10 years,
with an interim compliance with 90 dBA at no later than five years.
There are differences between industries in the economic burden likely
to be imposed. The factors which can be used to differentiate industries
in order to promulgate industry-specific standards, which differ in com-
pliance times, in certain cases are:
cost/benefit ratio
cost per measure of industry profitability
the likelihood of a technological breakthrough
the existence of government assistance
the likely effectiveness of proposed machinery regulations
OSHA enforcement priorities vis-a-vis industries, and
OSHA abatement and variance posture.
-------
8-15
In sum, we believe that there is sufficient evidence in the record to
justify setting an occupational noise exposure regulation. It would not be
beneficial to wait until more evidence is required. The form of the standard
must be such that the regulation is enforceable and likely to elicit an
effective response by those regulated. The regulation must be of the form
that can be effectively administered. The damage resulting from further
delay in the setting of a standard is substantial and warrants prompt and
deliberate action.
-------
APPENDICES
TABLE OF CONTENTS
APPENDIX A: Methodology of Cost Calculations
APPENDIX B: Detailed Methodology of the Hearing Conservation
Benefit Calculations
APPENDIX C: Rate of Unscheduled Absence for Wage and Salary
Workers by Occupation, 1972
APPENDIX D-l: Number of Cases and Cost of Compensation for
Occupational Loss of Hearing, New York State
D-2: Compensable and Compromise Cases for Loss of
Hearing, Wisconsin
D-3: Internal Ear Hearing Injuries Claimed on
Original Workers' Compensation Filing,
California
D-4 Total Potential Workers Compensation Payments
Saved at Equilibrium Based on Number of Workers
No Longer Compensable
-------
A-1
APPENDIX A: METHODOLOGY OF COST CALCULATIONS
1. COST ESTIMATES IN THE AGGREGATE
1.1 Computing Discounted Present Value of BBN Capital Costs
Table A1 Illustrates how the discounted capital costs were computed.
For example, BBN's estimate for compliance with an 85 dBA standard ($18,5^0
million) was broken down in an annual investment schedule for a 5-year com-
pliance period.' The annual investment was adjusted for cost reduction due to
technological change (3^/year) and a discounted present value adjustment
(discount rate of 7%).
TABLE A1
INTERMEDIATE CALCULATIONS FOR
COMPLIANCE ALTERNATIVE C.
nr/llara in Millions S Year Complianae BS dBA
Year
Investment
Rate*
85 dBA
Capital Cost**
Adjustment
Technological Change
Present
Value Adjustment***
Discounted
Capital Cost
1
5%
927
927
2
12%
2,224.8
.97
.935
2,017.78
3
22%
4,078.8
94
.873
3,347-14
4
29%
5,376.6
.91
.816
3,992.45
5
jn
5.932.8
.88
.763
3.983.52
100%
18,540.0
14,267.89
*The Investment schedule Is from the BBN estimate of the distribution of noise control capital cost over
different compliance periods. BBN Report No. 3246, Economic Impact Analysis of Proposed Noise Control
Regulation. Figures 3.1, p. 3-35
**BBN estimate total capital cost to comply with an 85 dBA standard Is $18,540 million.
***DIscount rate of 7%
1BBN Report No. 3246, Economic Impact Analysis of Proposed Noise Control
Regulation. Figures 3-1, p. 3"35.
-------
A-2
1.2 Calculation of Discounted Maintenance Costs.
The discounted maintenance costs were computed by multiplying 5% of
existing capital investment by the present value of an annuity at 1% over
the entire time-frame. Thus, the discounted maintenance cost for immediate
compliance with an 85 dBA standard for the first 20-year time-frame would
be:
Di scounted
Capital Cost To Annual Maintenance PV of Annuity Maintenance
Comply With 85 dBA Charge = .05 Capital Cost 20 Years at 7% Cost
18,5^0 x .05 x 10.59A - 9820.
The calculations for the discounted matntenance cost for Immediate com-
pliance with an 85 dBA standard for the second 25-year time-frame are pre-
sented in Table 4.1, footnote 4.
The calculation of the discounted maintenance cost for complianca scenarios
of 5 and 10 years take into account the capital investment schedules over the
compliance periods. Thus, annual maintenance charges are 5% of the existing
stock of capital at the end of the year. After full compliance is reached,
the annual maintenance charge is the same dollar amount and only the discount
factor varies.
-------
B-l
APPENDIX B: DETAILED METHODOLOGY OF THE HEARING CONSERVATION
BENEFIT CALCULATIONS
Section 5 of the main text of this report presented the results of
some exemplary calculations of the likely magnitude of hearing conservation
benefits. This appendix provides a more detailed elaboration of the methods
and assumptions used in the hearing conservation computations. Immediately
below, we shall delineate how the calculations were done. In general our
belief is that although there are a number of simplifying assumptions which
could be altered to produce more refined calculations, such refinements
would not substantially alter the conclusions.
The calculations were basically done in two steps:
Definition of exposures arid the exposed population. For each
compliance scenario, time point, industry, and mobility
assumption investigated, this step of the calculation estimated
the numbers of workers of different age groups with various
equivalent continuous noise exposures (dBA) over their previous
working lives since age 18. Toward this end:
Available exposure data from BBN were adjusted to reflect
approximate L ("equal energy", "3-dB trading rule")
eq
exposures rather than LqSHA ("5-dB trading rule")
exposures. (See Section 1.1)
Exposures were modified, where appropriate, to reflect
compliance with postulated regulations, using the assump-
tion that all exposures above a designated standard level
would be brought down exactly to the standard level.
(See Section 1.2)
Age X Exposure matrices were constructed, given the approxi-
mate age distribution of the workers in the 19 studied
industries in 1970. (See Section 1.3)
-------
B-2
Utilizing the "equal energy rule", equivalent continuous
exposures were calculated for worker populations with changes
in their exposure levels over time due to: (l) worker
mobility and (2) time after compliance with different noise
standards. (See Section 1.4)
Determination of hearing impairment "risk" and hearing conservation
benefi t. Given the population exposures defined in the first step,
hearing impairment within 20-25 dB, ZS~50 dB, and over 50 dB hearing
level categories was computed by:
Using the observations of Baughn' to define relationships
between the fraction of people in different hearing level
categories at any one time ("risk") and noise exposure for
particular age groups. (See Section 2.1)
Combining the "risk" relationships (Section 2.1) with the
previously defined Age X Exposure matrices (Section 1.4)
to compute the number of people in different hearing level
categories at any one time. (See Section 2.2)
From the numbers of people in particular hearing level
categories at various times after compliance, computing
the person-years of impairment prevented by different
compliance scenarios prior to the attainment of ultimate
equilibrium. (See Section 2.3)
I. ESTIMATES OF NOISE EXPOSURE
Assumption #1: BBN Estimates of Occupational Noise Exposure in 19
Industries
Bolt, Baranek, and Newman generously supplied us with a set of their
primary data estimating the distribution of noise exposures among production
workers in various industries in 1975 (Table Bl). These data are (1) more
-------
22
23
24
25
26
27
28
29
30
31
32
33
3*
35
36
37
49
TABLE B1
Estimate of the Number of Production Workers Exposed to
Time Weighted Continuous Sound Levels
(in Thousands)
INDUSTRY .
Food and Kindred Products
Tobacco Manufacturers
Textile Mill Products
Apparel s Other Textile Products
Lumber and Wood Products
"urniture and Fixtures
Paper and Allied Products
Printing and Publishing
Che-nicals and Allied Products
Petroleum and Coal Products
Rubber and Plastic Products
Leather and Leather Products
Stone, Clay 6 Glass Products
Primary Metal Industries
Fabricated Metal Products
Machinery, except Electrical
Electrical Equipment 6 Supplies
Transportation Equipment
Electric, Gas 6 Sanitary Servs.
Total
Total Workforce
Greater than 85
Greater than 90
Less Tban
80
80-85
85-90
90-95
95-100
100-105
640.57
204.99
74.98
168.53
25.80
9.53
55.50
3.00
0.58
2.88
1.84
77.41
108.89
180.30
153.80
107.52
123.08
989.77
27.75
10.28
---
3.97
31.60
41. IS
245.85
123.59
5.29
165.92
83.00
74.69
29.60
187.00
109.57
76.38
102.11
1.52
1.30
156.27
177.97
217.06
91.20
270.82
92.45
84.28
115.96
3-47
0.22
10.83
18.07
28.88
28.88
17.32
17-32
283-88
69-13
54.38
29.81
1.68
1 .42
206.18
3.82
2.12
354.12
79.78
34.46
2.38
12.76
178.52
184.04
229.90
188.05
101.61
61.68
516.13
174.61
129.76
68.50
94 .'47
13-75
781.78
287.73
157.69
84.54
34.16
26.83
940.60
127.94
54.34
17.40
0.68
1,34
740.23
136.06
119.88
64.48
64.46
8.04
30.96
148.61
253-87
185.76
6,590.46
2,069.01
1,825.02
1,579.73
578.12
282.56
105-110
0.95
12,939,300
1ป,321,800
2,454,640
0.62
0.49
8.93
0.55
11.54
-------
B-k
detailed than those previously published, in that they show the numbers of
workers at various levels over 90 dB in individual industries, and (2) do
not contain the uncertainty adjustment which BBN applied to the previously
published data.*
1.1 Computing L Noise Levels for Present Exposures
The figures in Table B1 reflect an estimate of 1975 noise exposures in
U.S. industry as determined by BBN under OSHA's current "5-dBA time-inten-
sity trading rule" (Designated as LqS^) In other words, when BBN found
workers with different exposure levels at different times during the work-
ing day, equivalent daily continuous exposure levels were estimated by a
formula which weighted noise exposures at 95 dB as twice as intense per
unit of time as exposures at 90 dB."" Although this bears a good relation-
ship to OSHA's current method of expressing noise exposure, the available
evidence*** suggests that an "energy" weighted average ("L " as defined by
- eq
EPA , essentially a 3~dBA time-intensity trading rule) is more apprpriate
for computing long-term hearing impairment. Unfortunately, underlying data
necessary for a precise calculation of L were not recorded by BBN. Instes
eq
BBN has suggested the following assumption for roughly estimating L
eq
exposures from their data for industries characterized primarily by fluctuat-
ing noise:
*Because of the uncertainty of the exposure estimates, BBN modified their
data be redistributing 1/2 of the workers in each 5-dBA exposure range into
the exposure ranges 5-dBA higher and lower than the original exposure
range. Example:
85-90 90-95 95-100
Before adjustment 0 100 0
After adjustment 25 50 25
We believe that the "best expected value" of the exposure distribution is
represented by the original data before adjustment, and have therefore based
our computations on the uncorrected observations.
**For example, a formula BBN may have implicity used is:
!z.2,/5tVi-90)
loska "30 + 5(,ฐ92fr7: })
where z. is the number of hours at an exposure level of Y. dBA
1 2 '
***Primari1y, the study by Burns and Robinson.
-------
B-5
Assumption ง2: For industries with primarily fluctuating noise*,
an estimate of the L exposure distribution can be generated by
shifting half of the workers in an exposure distribution to
the next higher 5 dBA exposure range. Example:
85-90 90-95 95-100
1 . J "
Before adjustment 100 200 0
After adjustment 50 150 100
Table B2 shows the results of applying this procedure to the BBN
data. Table B3 is a restatement of the data in Table B2 as percentages of
the total production workers in each Industry. These latter figures serve
as the basic exposure estimates for our exemplary calculations.
The gross numbers of workers given in Tables B1 and B2 refer to the
population of production workers employed in each industry in the first
half of 1975. That particular time period, of course, was a time of deep
recession and general employment levels were lower than can be expected
for non-recess Jonary periods in the coming years. Ideally, It would be best
to base our benefit calculations on projections of employment in individual
industries over the next several decades. Failing that, however, we have
elected to use average 1974 employment levels, as they are representative
of employment in current times:
Assumption Average Employment in Individual Industries Will Approximate
1974 Employment Levels for the Next Several Decades
To the degree that 1974 employment levels underestimate future employ-
ment levels, the benefit estimates will be somewhat underestimated. 1974
employment levels in the indicated industries are shown in Table B4. For
the sum of all 19 industries, the difference between 1975 and 1974 is the
difference between about 12.9 and 14.5 million production workers.
*$ld's 11, 13, 14, 25, 28, 29, 30, 31, 32, and 33, according to BBN. No
adjustment Is necessary for other Industries, with primarily constant noise.
-------
TABLE B2
Estimate of the Number of Production Workers Exposed to
Time Weighted Continuous Sound Levels
With L,- Adjustment for Fluctuating Noise
(in Thousands)
EQ
Modified from information
provided by
Bolt, Beranek, and Uewi-ia-i
Less Than
SIC
INDUSTRY
80
80-85
85-90
90-95
95-100
100-105
105-tlO
110-115
20
Food and Kindred Products
640.57
204.99
74.98
168.53
25.80
9.53
0.95
0.95
21 *
Tobacco Manufacturers
27-75
29.25
1-79
I-73
2.36
O.92
22
Textile Hill Products
77.41
108.89
180.30
153.80
107.52
123.08
23*
Apparel 6 Other Textile Products
494.89
508.76
19.01
5.14
24 *
Lumber and Wood Products
1.99
17.78
36.39
143.2
.184.72
64.44
2.64
...
25*
Furniture and Fixtures
82.96
124.46
78.85
52.14
14.8
26
Paper and Allied Products
167.00
109.57
76.38
102.11
1.52
1.30
0.62
27
Printing end Publishing
156.27
177.97
217.06
91.20
...
28*
Chemicals and All Ted Products
135.41
181.63
88.37
100.12
59.72
1.84
0.11
...
23*
Petroleum and Coal Products
5-42
14.45
23.47
28.88
23-i
17-32
6.66
30*
Rubber and Plastic Products
141.94
176.5
61.76
42.09
15.74
1.55
0.71
31*
Leather and Leather Products
103-09
105.00
2.97
1.06
---
32*
Stone, Clay 6 Glass Products
177.06
216.95
57.12
18.42
1-19
6.38
6.38
...
33*
Primary Metal Industries
69.26
181.28
206.97
208.97
144.84
81.64
30.84
...
3
-------
SIC
20
21 *
22
23 *
24*
25*
26
27
28 *
23 *
30 *
31*
32 4
-*
35
36
37
*9
TABLE B3
Estimate of the Percentage of Production Workers. Exposed to
Time Weighted Continuous Sound Levels'
With Lc- Adjustment for Fluctuating Nol.se
(In Thousands)
Modified from Information
provided by
Bolt, Beranek, and J
-------
sjl
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
49
B-8
TABLE B4
1974 EMPLOYMENT LEVELS
THOUSANDS OF
PRODUCTION WORKERS
INDUSTRY IN INDUSTRY IN 197*1
Food and Kindred Products
1,174
Tobacco Manufactuers
65
Textile Mill Products
875
Apparel & Other Textile Products
1,156
Lumber and Wood Products
539
Furniture and Fixtures
^33
Paper and Allied Products
545
Printing and Publishing
668
Chemicals and Allied Products
616
Petroleum and Coal Products
124
Rubber and Plastic Products
535
Leather and Leather Products
244
Stone, Clay 5 Glass Products
552
Primary Metal Industries
1,067
Fabricated Metal Products
1,137
Machinery, except Electrical
1,483
Electrical Equipment 6 Supplies
1,372
Transportation Equipment
1,260
Electric, Gas 6 Sanitary Services
630
A11 1ndustry Total
14,475
-------
B-9
1.2. Exposures After the Attainment of Different Compliance Levels
Assumption #4: The effect of "compliance" with a particular standard
level (85 or 90 dBA) will be, on balance,* to bring all
employees above the standard level down to the standard
level. Example:
80-85 85 85-90 90 90-95
Before compliance 25 35 40
After compliance with
90 dBA regulation 25 35 40
After compliance with
85 dBA regulation 25 75
1.3. Age X Exposure Matrices
Both the length of time individuals have been exposed to noise and the
magnitude of hearing losses due to presbycusis are related to age. For com-
putations of the hearing impairment experienced by the entire population'of
workers at any one time-point in the future, it is necessary to:
(1) compute the probability that individuals in each age group
will experience different degrees of impairment, and,
(2) multiply the results of (1) by the numbers of individuals in
each age group in the population at the designated time-point
in the future.
As implied by (2), it would be desirable to base exposure and effect
calculations on projections of the age distribution of the population at
various times In the future. For simplicity, however, we have elected to
assume a constant age distribution similar to the age distribution observed
In the 19 Industries In the 1970 census:
*The "balance" is between tendencies which produce overcomp1iance and op-
posing tendences which produce undercompI lance in the industrial population.
For discussion see our earlier publication^, page 2-14.
-------
B-10
Assumption #4: The age distribution of the population exposed to noise
and experiencing noise-induaed hearing impairment will be
constant over the next several decades at:
Age % of Population
18-24 16%
25-24 23%
35-44 22%
45-54 22%
55-64 15%
65+ 2%
Implicit in Assumption งk is a complete congruence between the age
distributions of the working population exposed to noise and the population
experiencing noise-induced hearing impairment at any one time. This is not
strictly the case. Older workers who retire from the workforce after noise
exposure will experience hearing impairment for the rest of their lives;
but because the age distribution in Assumption #k reflects only the working
population, post-retirement individuals and post-retirement hearing impair-
ment will not be included in the benefit computations. For this reason, the
results will tend to underestimate the true level of benefits.
In order for Assumption #k to be combined with the exposure data in
Table B3, it Is necessary to make two further simplifying assumptions:
Assumption ง5: All industries will have identical age distributionson
average3 over the next several decades.
Assumption #6: Within each industrys noise exposure is independent of age.
As can be seen in 1970 census data'' industries can differ in their aae
distributions. However, it is difficult to know if these inter-industry
differences can be expected to persist in consistent fashion over several
decades. To the degree that there are consistent inter-industry differences,
and to the degree that noise exposure Is not independent of age, then there
may be additional reasons why the population exposed to noise may differ in
age distribution from the population experiencing potenti-al noise-induced
hearing damage. Such differences may be expected to have similar effects on
-------
B-ll
the final estimates of benefits as the exclusion of retired workers dis-
cussed above.
Given the above assumptions, the exposure distribution for each industry
was multiplied by the uniform assumed age distribution to form an Age X Ex-
posure matrix for each industry. Table B5 is the Age X Exposure matrix for
the food industry. The food industry's overall exposure distribution from
Table B3 can be seen in the column labelled "Total, All Ages" at the extreme
right of Table B6. The overall age distribution from Assumption งk can be
seen in the bottom row, labelled "Total, All Exposures."
1. ^ Use of the "Equal Energy Rule" to Compute Equivalent Continuous
Exposures for Populations With Changing Noise Exposures
The exposures shown in Table B3 are our best estimate of the effective
noise dosage produced by particular jobs and received by production workers
on any one day in 1975. However, with the passage of years, two kinds of
changes in individual workers' exposures occur which must be dealt with in
any adequate description of population exposures:
Worker mobi1ity. Workers in relatively noisy jobs effectively
exchange places with workers in relatively quiet Jobs. This
reduces the effective exposure over time to individuals rotated
out of noisy jobs, but increases the total number of workers
exposed.
Changes In job noise levels. On compliance with occupational
noise regulations, individuals in noisy jobs would experience
a change in exposures.
2
Burns and Robinson, in their study of the effects of occupational noise on
hearing of a selected population of workers, found that it was possible to
formulate a simple rule for converting exposures which varied in the course
of a lifetime to contlnous exposure levels of equivalent impact on hearing.
This is the famous "equal energy rule" --so named because exposures of roughly
equivalent energy (with the "A" weighting of different frequencies) were
found to have roughly equivalent hearing impairment effects. In more
mathematical terms:
-------
B-12
TABLE B5
AGE - EXPOSURE MATRIX FOR SIC 20 --FOOD AND KINDRED PRODUCTS*
Exposure Level
Age Group
Total,
All Ages
18-24
25-34
35-44
45-54
55-64
65+
Less than 80
9.10
13-08
12.51
12.51
8.53
1.14
56.9%
80-85
2.91
4.19
4.00
4.00
2.73
.36
18.2%
85-90
1.06
1.53
1.46
1.46
1.00
.13
6.65%
90-95
2.39
3.44
3-29
3.29
2.24
.30
15.0%
95-100
0.37
0.53
0.50
0.50
0.34
.046
2.29%
100-105
0.14
0.19
0.19
0.19
0.13
.017
0.85%
105-110
0.013
0.019
0.018
0.018
0.013
.0017
0.084%
110-115
0.013
0.019
0.018
0.018
0.013
.0017
0.084%
Total, All
Exposure Levels 16% 23% 22% 22% 15% 2% 100%
* All figures are In percent of total workers In the Industry.
-------
B-13
Assumption ง7: For any number of noise exposures for z. years at Y. dBA3
Is 1*
an equivalent continuous exposure, L is given by:
eq
Zz.lOฐ-mCm
L =80 + 10 }
1.4.1 Effective Exposure Changes Due to Worker Mobility
Given Assumption #7 above, and the basic concept of worker mobility as
job exchange,* how can mobility be mathematically defined in order to form
the basis for computations of (l) equivalent continuous exposures and (2)
exposed population size? Consider an individual (A) of age (n) in a job of
(Y) dBA daily noise exposure. Imagine that (A) is one of a large group of
workers of the same age who have exchanged jobs at defined, regular intervals
since beginning work at age 18. Now let us define a worker mobility index
"WM" at the time points when exchange is about to occur as the number of
intervals which have elapsed for (A) since age 18.** Thus if the intervals
are so long that the first job exchange is about to occur (the Interval is
equal to the Job tenure), there is a worker mobility index of 1. If the
intervals are shorter, so that more Job-exchanges have taken place the job
mobility index takes on values greater than 1. In all cases WM can be
interpreted ei ther as:
(a) The number of Jobs of equal length (A) has held since age
18 (Jobs/worker), or
(b) The number of workers who have held the noisy job since
(A) was 18 (workers/Job), or
(c) 1
The fraction of each exposed worker's work experience spent
in a noisy job.
*No Jobs are gained or lost In the process. Implicitly, we consider a sub-
stantially full employment situation In which the number of workers is
equal to the number of jobs at any one time.
**Th!s Is equal to the number of job exchanges which have occurred, con-
sidering only the time points when an exchange is due.
-------
B- 14
Therefore, for a worker mobility index value of 3ป the total population which
has been exposed is simply three times the number of jobs, and by the equa-
tion in Assumption #7 if the "quiet job" exposures were at 80 dBA,* then L
for that population is:
"eq
o.Ky-80)
Leq{WM3) = 80 + 10
Similarly, for a worker mobility of 9, the total population exposed would
be nine times the number of jobs and the L would be:
eq
Leq(WH9) * 80 + 10
]0ฐ"1(y~ฎฐ)+8
Table B6 shows the L 's for various values of Y and worker mobilities of
eq
one, three, six, and nine.
TABLE B6
EFFECTIVE EXPOSURES
WITH VARIOUS LEVELS OF WORKER MOBILITY
WM1
WM3
WM6
WM9
1 Ui t-h
One Thi rd of
One Sixth of
One Ninth of
l w i in
eq
Each Worker's
Each Worker's
Each Worker's
No Job
Work Experience
Work Experience
Work Experience
Exchange
in Noisy Job
in Noisy Job
in Noisy Job
82.5
81.00
80.5
80.36
87.5
84.05
82.48
81.80
92.5
88.19
85.79
84.57
97.5
92.88
90.09
88.54
102.5
97-78
94.84
93.15
107.5
102.74
99.76
98.02
112.5
107.73
104.73
102.98
Relative size
of the
1
3
6
9
exposed
population
*That exposures for "quiet jobs" average 80 dBA exposure is an assumption
we use throughout.
-------
B- 15
In the main text of our testimony (Section 5.1.2) some evidence is pre-
sented which tentatively suggests that worker mobility, defined analogously
to the simple case given here, is roughly constant with increasing age and
may be approximately equal to three." For purposes of our computations, ex-
cept where otherwise stated, we assume a worker mobility value of three.
Operationally, the effect of this assumption is to change the "exposure
level" column on Age X Exposure matrices (such as Table B5) to the dBA
values shown under WM3 on Table B6.
1.4.2 Equivalent Continuous Exposure Levels at Different Times Under
Different Compliance Scenarios
Beginning with the time of compliance with either 90 dBA or 85 dBA
regulations, the workforce will consist of individuals who have spent various
proportions of their working lives under pre-compliance and post-compliance
exposure conditions.** The proportion of pre-compliance to post-compliance
exposures will vary systematically with
(a) age--0ther things being equal, the workers who are older
at any one time will have spent a larger proportion of
their working lives under pre-compliance conditions.
(b) time after compliance--0ther things being equal, the proportion
of workers' experience under pre-compliance conditions will
decrease as more time passes after compliance.
The equation given previously in Assumption #7 allows us to compute
equivalent continuous exposures for any Individual age group of workers at
any time after Initial compliance, provlded that we make assumptions about
(1) the exposure conditions prevailing throughout the entire work history,
of the workforce prior to compliance,*** (2) the age at which workers enter
the workforce. For simplicity, we have chosen to use the following assumptions
on these Issues for our exemplary calculations:
*Note caveats on Table 5.2, p. 5~12.
**The ultimate equilibrium of pure post-compliance exposure profiles will
not be achieved until the entire workforce present at the time of com-
pliance Is replaced by new workers--at least forty years after compliance.
***That is, have noise exposures In the past been generally greater, less
than or equal to the noise exposures esimated by BBN for 1975?
-------
B-16
Assumption #8: Throughout the entire work history of workers employed at
the time of compliance> noise exposures produced by in-
dividual jobs will have been constant at levels shorn in
Table BZ.*
Assumption #9: All production workers enter the workforce at age 18 and
work continuously thereafter until retirement.
Table B7 shows the equivalent continuous exposure levels computed in this
way for the time-point 20 years after compliance with an 85 dBA regulation.
TABLE B7
L EXPOSURES TWENTY YEARS AFTER COMPLIANCE WITH
eqAN 85 dBA REGULATION (WORKER MOBILITY OF 3)
Age Group
Pre-Compliance
Exposure Level*
18-24
45-54
55-64
65-7A
81.00
81.00
81.00
81.00
81.00
81.00
81.00
84.05
82.36
82.36
82.54
83.07
83-33
83.47
88.19
82.36
82.36
83.35
85.50
86.31
86.74
92.88
82.36
82.36
85.22
89.22
90.41
91.01
97.78
82.36
82.36
88.46
93.72
95.08
95.74
102.7^
82.36
82.36
92.71
98.55
99.97
100.66
107.73
82.36
82.36
97.44
103.49
104.33
105.63
Average No.
Years With
Pre-Compllance
Exposures
0
0
2
12
22
32
No. Years With
Post-Compllance
Exposures
3
12
20
20
20
20
^Exposure shown are
(See Section 1.4.1
after allowance
for derivation)
for a worker mobility index
. With this worker mobility
of 3
Index
post-compllance exposure to 85 dBA translates into equivalent continuous
exposure to 82.36 dBA.
*As modified, of course, by considerations of worker mobility. Implicitly,
also, no effect is assigned to previous programs of audiometry and hearing
protector use.
-------
B-17
It may be observed that Assumption #8 has the effect of treating
"compliance" as a uniform time-point across a!1 Industry. It Is clear,
however, that compliance will be achieved over some finite time period as
the Investments in noise control are made by different firms in different
industries. (In formulating our "compliance scenarios" we have implicitly
assumed that the minimum likely time-period for this investment will be five
years.) For the benefit computations, we have chosen to date the initiation
of "compliance" as beginning all at once at the end of this five-year period.*
This procedure will somewhat underestimate the magnitude of pre-equi1ibrlum
benef1ts.
2. ESTIMATES OF HEARING IMPAIRMENT AND HEARING CONSERVATION BENEFIT
The previous section indicated the methodology and assumptions used in
estimating equivalent continuous exposures for the population of production
workers at various times under different compliance scenarios. In this
section we shall set forth our assumptions about the relationships between
exposure, age, and hearing impairment, and show our methodology for computing
equilibrium and pre-equi1ibrium hearing conservation benefits.
2.1 Relationships Between Noise Dose and Hearing Impairment Risk for
Different Age Groups
All of our computations to-date are based on the Baughn observations of
noise-Induced hearing Impairment among a large group of U.S. automobile
workers.'
Assumption ง10: The Baughn damage-risk data accurately predict the best
expected value of noise-induced hearing impairment for the
existing population of U.S. workers in all industries.
Use of this particular data set is not without controversy. In our earlier
publication** we examined the objections which have been raised to the Baughn
*For the two-step compliance scenario [90 (5 years), 85(10 years)]
^or benefit computation "compliance" with 90 occurs all at once at the five
year time point, and "compliance" with 85 occurs all at once at the ten year
time point.
**Reference 4, pp. 2-17 and 2-18.
-------
B- 18
data and concluded that despite some uncertainties, the Baughn observations
are the most appropriate data-set currently available for estimating likely
hearing conservation benefits. That discussion need not be repeated here.
There were three basic steps necessary to convert the Baughn data to
a form usable in our calculations:
(1) The total risk* of crossing specific fences (at 20, 25, and 50 dB
averaged at .5, 1, 2 KHz RE: ISO) for selected age groups and
exposure levels was read from Figures 8, 9 and 11 of Reference 1.
(2) For each age group and fence, the risk of crossing the fence
with 80 dBA exposure was subtracted from the risk of crossing the
fence at other exposures. The result was the estimate of noise-
induced risk after allowance for presbycusis.
Asseumption #11: At 80 dBA continuous exposure all hearing impairment is
due to presbycusis and none is due to noise.
(3) To compute the net change in proportion of people in the 20-25
dB hearing level range, the risk of crossing the 25 dB fence was
subtracted from the risk of crossing the 20 dB fence for each
age and exposure group. The net change in the proportion of
people in the 25~50 dB hearing level range was similarly computed
by subtracting the risk of crossing the 50 dB fence from the risk
of crossing the 25 dB fence.
The resulting relationships between exposure level and the increase in
the proportion of people of specific ages in different hearing level cate-
gories are shown graphically in Figures B1 through B3. In some cases
(particularly the older age groups for the 20-25 dB hearing level category^
it can be seen that the function takes on negative values. In those cases,
the influence of noise is to move more people out of the indicated hearing
level category (and into categories of worse hearing level) than are being
moved in (from categories of better hearing level).
*"Risk" of crossing a fence as used here refers to the proportion of the
population expected to cross that fence.
-------
B-19
FIGURE B]
BAUGHN DAMAGE-RISK DATA
FOR HEARING LEVELS IN
20-25 dB RANGE*
% Of Add Itional
Workers Experiencing
Hearing Levels In
20-25 dB Range**
-30
* After subtraction for presbycusis.
** (.5, 1, 2 kHz) Re: ISO.
-------
B-20
FIGURE B2
BAUGHM DAMAGE-RISK DATA
FOR HEARING LEVELS IN
25-50 dB RANGE*
EQUIVALENT CONTINUOUS
NOISE EXPOSURE (dBA)
SINCE AGE 18
* After subtraction for presbycusis.
** (.5, 1, 2 kHz) Re: ISO.
-------
B-21
FIGURE B3
BAUGHN DAMAGE-RISK DATA
FOR HEARING LEVELS IN
> 50 dB RANGE*
EQUIVALENT CONTINUOUS
NOISE EXPOSURE (dBA)
SINCE AGE 18
* After subtraction for presbycusis.
** (.5, 1, 2 kHz) Re: ISO.
-------
B-22
2.2 Computation of the Number of People in Different Hearing
Impairment Categories at Any One Time
Given the relationships shown in Figures B1-B3, for each state of
compliance and time-point investigated, a set of three "risk matrices"
were derived, consisting of the proportion of each Age X Exposure group
moved to each of the three hearing level categories by the influence of
occupational noise. For example, the risk matrix for the 25-50 dB hearing
level category for the time-point 20 years after compliance with the 85 dBA
standard is shown in Table B8.
To compute the numbers of workers experiencing hearing levels in various
categories because of the influence of noise at each specific time-point, two
additional operations were performed:
(1) The appropriate "risk matrix" was multipled by the appropriate
"Age X Exposure matrix" and the worker mobility index,
(2) The resulting numbers of workers experiencing hearing levels
in the specified range were summed for all age and exposure
groups.
Using these procedures, the numbers of workers in particular.hearing level
categories were estimated for the various compliance scenarios at time-
points 5, 10, 20, and equilibrium (40) years after initial compliance at year-
5 in the diagrams in Figure 4.3 of the main text. "Benefits" for each scenario
at each time-point were defined as the difference between the predicted
number of people with a given level of hearing Impairment under the scenario
in question and the number which would suffer that impairment under the "0"
scenario (no change from present exposures).
2.3 Computation of Pre-equi1ibrium Person-Years of Impairment Under
Different Compliance Scenarios
Ideally it would be desirable to compute a mathematical function which
would describe the benefits of each scenario at all time-points from compliance
through ultimate equilibrium. Then that function could be integrated over
-------
B-23
TABLE B8
"RISK MATRIX"
Proportion of Workers Added to the 25*50 dB Hearing Level Category
By The Influence of Noise
(Time: 20 Years After Compliance with 85 dB Standard, WH3)
Pre-Compliance Age Group
L Exposure
eq p
Group*
16-24
25-34
35-44
45-54
55-64
Over 65
Less Than 80
0
0
0
0
0
0
81.00
.001
.0076
.011
.015
.018
.004
84.05
.00236
.0179
.03
.045
.055
.015
88.19
.00236
.0179
.04
.085
.095
.035
92.88
.00236
.0179
.065
.155
.155
.045
97.78
.00236
.0179
.115
.245
.22
.075
102.74
.00236
.0179
.20
.355
.29
.085
107.73
.00236
.0179
.32
.44
.31
.035
*This column is for group identification only. The indicated Lg^ is after
adjustment for worker mobility, but before adjustment for change in exposure
due to compliance with the regulation. The risk numbers shown, however,
reflect the exposure matrix shown in Table B 7 which does Include the L
exposure reductions attributable to the twenty years of compliance with ec^
the regulation.
-------
B-24
time to arrive at a precise estimate of the person-years of impairment pre-
vented under each scenario prior to equilibrium. Pending development of such
a function however, it is possible to obtain a reasonable approximation of
the ultimate result by essentially drawing straight lines between the number
of people (P) kept out of each hearing impairment category at the determined
timepoints (0, 5, 10, 20, and kO years). Using this procedure, the total
number of person-years of impairment in any given hearing level prevented
by a particular compliance scenario is given by:
0 + P P + P
Person-Years of Benefit = (5 years) (^-) + (5 years) (-^-j) +
(10 years) (Iiฐ-^ฐ> + (20 years) ft" S
-------
B-25
REFERENCES
1. Baughn, W.L. Relation Between Daily Noise Exposure and;Hearing Loss
Based on the Evaluation of 6855" Industrial Noise Exposure Cases,
Joint EPA/USAF Study, AMRL-TR-73"53 (June 1973).
2. Burns, W., and Robinson, D.W., Hearing and Noise in Industry, Her"
Majesty's Stationery Office, London England, (1970).
3. EPA, Office of Noise Abatement and Control. Information on Levels of
Envlronmental Noise Requisite to Protect Public Health and Welfare
with an Adequate Margin of Safety"! Superintendent of Documents, U.S.
Government Print! ng office, Washington, D.C. 20402 (1974).
4. Hattis, D., et al. Some Considerations irrChoosing an Occupational
Noise Exposure Regulation, EPA 550/9~76-007, (February, 197o).
5. U.S. Bureau of the Census. U.S. Summary, Table 34 "Age of Employed
Persons by Detailed Industry, and Sex: 1970", U.S. Government
Printing Office, Washington, D.C. 20402.
-------
Appendix C
Rate of Unscheduled Absence for Wage
and Salary Workers by Occupation, 1972.
Absent Part of
Week- Absent Entire Week-
Occupation Medical Causes Total Causes
Professional 2.1 1.7
Managerial 1.3 1.5
Clerical 3.0 2.0
Sales 1.5 2.k
Craftsmen 2.1 2.3
Operatives 3.^ 3.1
Laborers 3-2 2.7
Source: J.N. Hedges, "Absence from WorkA Look at Some National Data",
Monthly Labor Review, Vol. 96, No. 7 (July 1973)> p. 28
-------
D-l
Appendix D-l
OCCUPATIONAL LOSS OF HEARINGl/
Number of Cases and Cost of Compensation
Compensated Cases Closed, New York State, 1959 - 1973
1
<
: :
Amount of
Year of :
: Number :
compensation
Qlositlg
: of cases s
awarded
1959
70
$ 73,891
1960
69
80,258
1961
185
232,856
1962
110
128,883
1963
77
.121,987
1964
84
128,019
1965
82
139,128
1966
54
118,624
1967
90
206,076
1968
105
201,485
1969
67
164,440
1970
101
251,521
1971
106
277,777
1972
165
434,911
0-973
227
543,652
yMainly due to continual exposure to loud noise.
Note: Medical and hospital costs are not included in
the compensation awarded.
Prepared by; New York State
Workmen's Compensation Board
Administration Division
Office of Research & Statistics
May 18, 1976
-------
D-2
Appendix D-2
Occupational Disease
Compensable And Compromise Cases Closed By Worker's Compensation Division
1970-1975
Loss Of Hearing
l ota l
Average
Ito. Of
Ho.
Amount
Compen-
Total
Average
Nature Of Injury
Compen-
Amount Of
Of
Of
satl on
llo. Of
Amount Of
Settlement
sable
1 ndemn 1 ty
Fee
Hedl ca 1
Per
Comp romlse
1ndemnIty
Per Case 2/
Year
Cases
Cases
Aid
Case 1/ '
Cases
Loss Of Hearing
Occupat1ona 1
1970
43
$ 91,780
2
$ 817
$ 2,321
9
$23,244
$ 2,583
1971
41
93,592
4
1,279
2,725
14
27,083
1,935
1972
60
141,163
7
535
2 ,429
22
61,259
2,785
1973
54
131,928
8
2,865
2,801
28
67,727
2,419
197^
53
135,203
18
1,630
2,642
30
71,161
2,372
1975
117
247,307
44
4,334
2,213
34
78,195
2,352
1/ Average Indemnity payment plus average medical payment.
2/ Includes average compromise payment plus average medical aid,
NOTE: Compensable cases include all cases, except compromise cases, in which indemnity
(workmen's compensation) is due and payable.
Compromise cases include all cases in which a compromise of liability under the
Workmen's Compensation Act of Wisconsin is made by the employer and the employee.
The amount of the compromise settlement includes both indemnity and medical aid.
Prepared by:
Risk Management Section, Research and Statistics Bureau, Department of Industry,
Labor, and Human Relations, State of Wisconsin.
-------
D-3
APPENDIX D-3
INTERNAL EAR HEARING
WCAB STATISTICAL REPORTS
TABLE 9--INJURIES CLAIMED ON ORIGINAL FILINGS*
Off Ice
Fiscal Year
1974-1975
Fiscal Year
1975-1976
Bakersfield
24
18
Bell Gardens
159
250
Eureka
37
35
Fresno
26
81
1nglewood
57
52
Long Beach
113
161
Los Angeles
119
172
Oakland
91
130
Pomona
72
124
Redd i ng
98
66
Sacramento
85
99
Salinas
8
21
San Bernardino
167
128
San Diego
34
69
San Francisco
80
98
San Jose
33
46
Santa Ana
98
130
Santa Barbara
25
55
Santa Monica
33
59
Santa Rosa
21
40
Stockton
21
38
Van Nuys
137
150
Ventura
64
66
Statewide
1,602
2,028
Original filings Include applications, stipulations with request
for award, and requests for approval of C S R.
Prepared by: Workers' Compensation Appeals Board Division of Industrial
Accidents, State of California
-------
APPENDIX D-4
TOTAL POTENTIAL WORKERS COMPENSATION PAYMENTS SAVED AT EQUILIBRIUM
BASED ON NUMBER OF WORKERS NO LONGER COMPENSABLE
(Discounted to Present Value)
25*50 dB*
> 50 dB*
Present Minus
Comply 8$
Present Minus
Comply 90
Present Minus
Comply 85
Present Minus
Comply 90
Total Present Minus
Comply 65
Total Present Minus
Comply 90
After Compliance 85
After Compliance 90
528.27
*For compensation calculations handicap is measured as 1-1/2 percent for each dB
loss between average hearing levels of 26 dB and 92 dB. Based on 10 state average
maximum payment of $19,000, 15% handicap (at 25-50 dB) equals $2,850/worker, and
354 handicap (at >50 dB) equals $6,650/worker.
Range
Of Years
Year
MidDOlnt
Thousands
Of Persons
$ Mi 11 ions
Saved
Thousands
Of Persons
$ Mi 11 ions
Saved
Thousands
Of Persons
$ M i11ions
Saved
Thousands
Of Persons
$ Millions
Saved
Total
$ Mi11 ions
Saved
Present
Value Of
flnnui ty
Of SI
Total
5 Mi M ions
Saved
Present
Value Of
Annu:ty
Of SI
0-5
2-1/2
2.4
6.84
1.3
3-71
ฆ 3
1.20
.2
1.33
8.04
32.96
5.04
20.66
5-10
7-1/2
7.2
20.52
4.3
12.26
.8
5.32
.4
2.66
25.84
75.76
14.92
43-63
10-15
12-1/2
10.8
30.78
6.2
17.67
1.4
9.31
.6
3.99
40.09
'117.22
21.66
45-14
15-20
(20 yr)
17-1/2
14.9
42.47
8.7
24.80
2.0
13.30
1.1
7.32
55-77
82.8?
(308.81)
32.12
47-73
(157-16)
20-25
22-1/2
17.8
50.73
10.1
28.76
2.4
15.96
1.3
8.65
66.69
70.69
37.4)
39.65
25-30
27-1/2
20.4
58.14
U-3
32.21
3.2
21.28
1.7
11.31
79.42
59.96
43-52
32.86
JO-35
32-1/2
23.8
67.83
12.5
35-63
3.8
25.27
2.0
13.30
93.10
49.99
48.93
26.28
35-40
37-1/2
25.3
72.11
13-7
39.05
4.4
29.26
2.3
15.30
101.37
38.82
54.35
20.82
Total Savi
ings Over
Flrst AO Years
276-7?
Explanation of Method Used In Deriving Table D-4
Using the number of moderately and severely impaired workers who leave the workforce at years 5, 20, and AO at SO and 85 dBA
(and hence are prevented from being placed in the compensable category), we have extrapolated to the midpoint years for eight
5-year ranges over a AO-year compliance period. We then multiplied the number of "saved" workers by a hearing impairment
payment depending on the severity of hearing loss to obtain the annual workers' compensation savings for the midpoint years.
These were totalled to obtain the savings for combined moderate and severe hearing loss for both 90 and 85 dBA standards and
discounted using an annuity method to arrive at a *ป0-year equilibrium total savings.
------- |