A continuation of PubPol 555, this course focuses on microeconomic concepts relevant to policy analysis that are not covered in the previous semester. We will cover in depth various "market failures" — externalities, public goods and asymmetric information — for which there is an economic rationale for government intervention. We will also discuss ways in which the government might improve on the free market in those cases. Algebra and graphical analysis will be used to demonstrate concepts.
The last part of the course will introduce Cost-Benefit Analysis (CBA) as a means of analyzing how a proposed policy will affect social well-being from an economic perspective. In this section, we will focus on the big picture — overview of the methods, the advantages and limitations of the approach, examples of actual CBAs — rather than the nuts and bolts of performing CBA.
Throughout the course, we will apply course concepts to existing or proposed public policies. My goal is to use real world examples to both reinforce the intuition behind the microeconomics and to clarify how these tools might be useful in your future careers as public policy professionals.