module specification

This module examines public economics. It covers the theoretical aspects of public economics, namely market failure, theories of public goods, externalities, asymmetric information, social choice, inequality, commodity and income taxation. It discusses applications of these concepts by covering selected topics in economics of health, energy, insurance and communication. Further, it covers some recent developments in public and welfare economics: economics of giving, altruism and reciprocity, economics of happiness, and social economics.

EC5006 Microeconomics or EC5001 Business Economics or equivalent

The module aims to provide students with:
1. a systematic knowledge and understanding of public economics, including a critical awareness of current issues in the subject and the available evidence;
2. an ability to apply economic principles and analysis in a variety of contexts including in business and government;
3. a range of transferable and subject-specific skills that will be of value in employment and self-employment;
4. an appreciation of the economic dimension of wider social, regional and political issues.

It also aims to develop students' skills, in particular: literacy; academic study skills; applied analysis; critical thinking; problem solving; communication, including oral presentation; and quantitative analysis.

Introduction to public economics
Theoretical review: equilibrium and social welfare
Market failure
Externalities
Asymmetric information
Applications: health, insurance, environment and energy
Public goods
Social choice
Poverty and Inequality
Income redistribution, altruism and reciprocity
Tax incidence, tax efficiency, and tax evasion
Social Security and Pension Insurance
Public and social enterprises
Social economics: evolution of norms, social capital, trust
Economics of communication (Transport, Digital, telecoms, Post etc)
Economics of happiness.

Teaching is structured around three hours of weekly contact time with the students. The three hours of contact time are structured as follows:
Integrated Lecture/workshop – two hours per week. The lecture will discuss the week’s topic by presenting the main theoretical analysis. Lecture materials will be available on Weblearn. In the Spring Term, lectures will be partitioned into two sections of one hour each. In the first section, a formal lecture will be delivered. The second section will be more workshop oriented with greater student discussion and participation.
Tutorial - one hour per week. The tutorial will go through problem sets available on WebLearn. Students are expected to prepare for these tutorials and will lead the presentation of answers to the problems and subsequent discussion. Unseen in-class tests (weeks 8 and 24) will take place during these tutorial sessions.
 

On successful completion of this module students will be able to:
1. demonstrate a broad knowledge and a systematic understanding of public economics covering theory, policy and application;
2. provide analysis of the role of state and local governments as providers of public goods, highlighting the potential efficiencies and costs of decentralization and understand and critically assess the operation of major industrial sectors what are wholly or partially under government control;
3. apply a range of specialist skills to the organisations in which they as specialists may operate, including the application of analytical or quantitative techniques;
4. marshal evidence and assimilate, structure, analyse and evaluate qualitative and quantitative data to understand and critically evaluate policy issues in the subject.

The module will be assessed by one unseen two hour exam, one  unseen in-class tests and an essay that is presented in the seminar. There will be one  60 minute unseen in-class test in week 13. The seen essay will be written up and presented in the Spring semester.

Hindriks, J. and Myles. G.D. (2006). Intermediate Public Economics, MIT Press
Gruber, J. (2011). Public Finance and Public Policy, 3rd ed., Worth Publishers (Macmillan)
Stiglitz, J. (2000). Economics of the Public Sector, 3rd ed., W. W. Norton & Co.
Zweifel, P., Breyer, F., Kifmann, M. (2009). Health Economics, 2nd ed., Springer
Bhattacharyya, S.C. (2011). Energy Economics, Springer
Kolm, S.-Ch., Ythier, J. M. [eds.] (2006). Handbook of the Economics of Giving, Altruism and Reciprocity, Elsevier
Benhabib, J., Bisin, A., Jackson, M. [eds.] (2001). Handbook of Social Economics, Elsevier
Bruni, L., Porta, P. L. [eds.] (2007). Handbook on the Economics of Happiness, Edward Elgar