Economic Analysis of Public Policy

Faculty

KANEMOTO, Yoshitsugu

Credit / Semester / Schedule / Language

2 Credits / Summer / Wednesday Period: 5 / English

Objectives/Overview

The objective of the course is to enable students to conduct policy analysis for real-world policy problems. The students are expected to learn how to design and conduct a policy research for a given policy problem and to evaluate policy alternatives with solid understanding of the theoretical foundation of cost-benefit analysis and full recognition of their effectiveness and limits.
Topics covered are (1) the theoretical foundation of cost-benefit analysis, (2) concepts and tools in cost-benefit analysis such as the social discount rate, risk and uncertainty, existence value, hedonic and travel cost methods, CVM, evaluation by social experiments, (3) application of cost-benefit analysis and cost-effectiveness analysis to public projects and regulation policies, (4) policy simulations with market distortions, (5) policy simulations with oligopolistic markets, among others. These topics are combined with discussions of real-world case studies.
This coures requires good understanding of elementary economics and statistics but does not pursue sophisticated economic analysis. Prerequisites are
(1) Microeconomics for public policy
(2) Statistical Method
or their equivalents.

Keywords

cost-benefit analysis, policy analysis

Schedule

Tentative, subject to change

1. Introduction: How to do Policy Analysis
2. Foundations of Cost-Benefit Analysis
3. Discounting
4. Policy Evaluation Cases: Infrastructure Investment
5. Risk and uncertainty
6. Estimating Benefits: Market Demand Function, Indirect Maket Methods, CVM, Secondary Sources
7. Policy Evaluation Cases: Policy Simulation with Market Distortions
8. Policy Evaluation Cases: Policy Simulation for Oligopolistic Markets
9. Cost-effectiveness analysis
10. Distributional Weights

Teaching Methods

Lectures, assignments, and discussions.

Grading

To be announced in the class.

Required Text

Boardman, A. E, D. H. Greenberg, A. R. Vining and D. L. Weimer. Cost-Benefit Analysis: Concepts and Practice, Fourth Edition. Prentice-Hall, Upper Saddle River, NJ, 2010.