Economic Analysis of Public Policy


Yoshitsugu KANEMOTO

Credits / Language / Semester

2Credits / English / Summer


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, among others. Students are required to conduct real-world case studies.


cost-benefit analysis, policy analysis


Tentative, subject to change
Topics covered are:
1. Introduction: How to do Policy Analysis
2. Foundations of Cost-Benefit Analysis
3. Valuing benefits and costs
4. Discounting
5. Predicting and monetizing impacts
6. Estimating Benefits: Market Demand Function
7. Policy Evaluation Cases: Transportation Investment
8. Estimating Benefits: Experiments and Quasi Experiments
9. Estimating Benefits: Indirect Market Methods
10. Estimating Benefits: Contingent Valuation
11. Estimating Benefits: Shadow prices from secondary sources
12. Risk and uncertainty
13. Cost-effectiveness analysis
14. Social discount rate
15. Existence value
16. Distributional Weights
17. Presentation of policy analysis mini projects

Teaching Methods

Lectures, assignments, and discussions.


Excercise problems, a case study report, and class participation

Required Textbooks

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.

Reference Books

To be announced.

Notes on Taking the Course

This course 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.

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