PPA 220B – APPLIED ECONOMIC ANALYSIS II
GRADUATE PROGRAM IN PUBLIC
POLICY AND ADMINISTRATION
CALIFORNIA STATE UNIVERSITY, SACRAMENTO
SPRING 2004
(Full Semester: January 29 - May 20)
Professor: Rob Wassmer, Ph.D.
E-Mail: rwassme@csus.edu
Home-Page: http://www.csus.edu/indiv/w/wassmerr/
Class Location: Thursday, 6:00 p.m. - 8:50 p.m., 3005 Lassen Hall
Office: Room 3037 Tahoe Hall
Office Phone: (916) 278-6304
Office Hours: Tuesday and Thursday, 4:00 - 6:00 p.m.; and by appointment if necessary
Prerequisite: A grade of B- or higher in PPA 220A.
Required Texts:
(1) Course pack which includes selected chapters of State and Local Public Finance, 2nd Edition, Ronald C. Fisher, Irwin;
must be purchased at CSUS bookstore;
(2) Cost-Benefit Analysis for Public Sector Decision Makers, Diana Fuguitt and Shanton J. Wilcox, Quorum Books;
can be purchased at CSUS bookstore or click here to purchase at Amazon. COM;
(3) Heaven's Door: Immigration Policy and the American Economy, George J. Borjas, Princeton University Press;
can be purchased at CSUS bookstore or click here to purchase at Amazon. COM;
(4) California State and Local Government in Crisis, 5th Edition, Walt Huber, Etc. Press,
can be purchased at CSUS bookstore or call Etc Press at (818) 242-1561;
(5) Market-Based Reforms in Urban Education, Helen F. Ladd, Economic Policy Institute,
can be purchased at CSUS bookstore or click here to purchase at Amazon. COM;
(6) Your Money or Your Life: Strong Medicine for America's Health Care System, David M. Cutler, Oxford University Press,
can be purchased at CSUS bookstore or click here to purchase at Oxford University Press ;
(7) Local Tax Policy: A Federalist Perspective, David Brunori, Urban Institute Press,
can be purchased at CSUS bookstore or click here to purchase at Urban Institute Press;
There will also be various supplemental readings assigned throughout the semester. These are listed in the schedule below. Copies of these readings are either available directly from the Internet (an electronic link is provided below) or I will provide a paper copy in class.
Internet:
This course requires that you have an internet account that allows access to the World Wide Web. If you do not have one at home or work, you can get one through CSUS. At my homepage I will post an outline of each meeting and a description of the homework that is due at the following meeting. These will be available by 4 p.m. the day of class. There will also be other handouts posted at this site.
Objective:
At the end of PPA 220B, it is expected that a student that attends all meetings will:
(1) Understand the basic process of how to conduct a benefit/cost assessment and have a working knowledge of some of the specific techniques necessary to do it.
(2) Develop a basic understanding of key concepts used by economists in their study of state and local public finance (structure of government, incidence of a tax, effect of a subsidy, etc.).
(3) Be able to accurately summarize key institutional changes in California's intergovernmental climate (Serrano vs. Priest, Proposition 13, ERAF, etc.) and the policy impacts that they continue to have.
(4) Use the tools of policy analysis to reach evaluatory conclusions on key policy concerns affecting the state (for example: immigration, drug legalization, school vouchers, low-income housing etc.).
This course will expose the graduate student of public policy to basic public economics through the study of market failure, public choice, government organization, expenditure, taxation, and state and local government applications specific to California. The student will be expected to learn some simple economic theory; but keep in mind that the goal in doing so is to better understand, analyze, and critique existing and proposed government policies.
Method:
Each week, students will be required to complete a well-developed question from that week's assigned readings and written answers to questions related to the readings. There will be 14 of these assignments and only the top 12 grades will count. You can only turn in your assignment the night that it is due (no exceptions). We will go over assignments at the meeting that they are due. There is a mid-term assignment that is a ten-page prospectus on a hypothetical benefit-cost study that could be conducted as a Master's thesis, and a final exam that is take home and to primarily be done independently, but with the assistance of one other person. The final exam will consist of three essay questions.
This class will entirely be conducted in an active learning format that focuses on discussion of the concepts and issues covered in the readings. Quite different from PPA 220A, I will not directly lecture on specific topics, but instead lead student centered discussions on them. In order for this to happen, it is essential that students do all of the required readings for the week. I will assign a student to take the "lead" on particular readings. These assignments will be made a week earlier.
Schedule:
This class will meet a total of 15 times throughout the semester. The readings for each meeting are given below. A reading out of Fisher is designated by "Fish", Fuguitt/Wilcox by "FugWil", Borjas by "Bor", Huber by "Hub", Brunori by "Bru", Ladd by "Lad", and Cutler by "Cut".
Meeting 1 (Jan. 29)
Background and How to Do Cost-Benefit Analysis
FugWil (Chapter 1) - A History of Application
FugWil (Chapter 2) - The Decision Maker, the Analyst, and CB Analysis
FugWil (Chapter 3) - Policy Advocates and Adversaries
FugWil (Chapter 4) - Economics and Cost-Benefit Analysis
FugWil (Chapter 5) - Economic Valuation of Individual Preferences
FugWil (Chapter 6) - Who is Society?
FugWil (Chapter 7) - With and Without Analysis
FugWil (Chapter 8) - Aggregate Benefits and Costs
FugWil (Chapter 9) - Present Value of Benefits and Costs Over Time
FugWil (Chapter 10) - Decision Criteria
Hahn, Tetlock, and Burnett (Web Link), Should You Be Allowed to Use Your Cellular Phone While Driving?
How to Do Cost-Benefit Analysis
FugWil (Chapter 11) - Discount Rate
FugWil (Chapter 12) - Inflation
FugWil (Chapter 13) - Time Horizon
FugWil (Chapter 14) - Uncertainty and Risk
FugWil (Chapter 15) - Principles of Cost-Benefit Analysis
FugWil (Chapter 16) - Identifying Benefits and Costs
FugWil (Chapter 17) - Market Valuation
National Center for Policy Analysis (Web Link), Global Warming Policy: Some Economic Implications
Benefits and Costs: Identification and Valuation
FugWil (Chapter 18) - Contingent Valuation
FugWil (Chapter 19) - Travel Cost Method
FugWil (Chapter 20) - Hedonic Pricing Method
FugWil (Chapter 21) -Valuation of Human Life
FugWil (Chapter 22) - Cost-Effectiveness Analysis
FugWil (Chapter 23) - Principles for Identifying
Krupnick (Web Link), How Much Will People Pay for Longevity?
Background on State and Local Public Finance
Fish (Chapter 1) - Why Study State and Local Public Finance
Fish (Chapter 2) - Market Efficiency and Market Failure
Shrag, (Handout), "The Spirit of 13," in Paradise Lost: CA' s Experience, America's Future
Hub (Chapter 1) - California in Crisis
PPIC (Web Link) - California's Tax Burden
PPIC (Web Link) - California's State Budget
Tax Foundation (Web Link) - Comparing the Total Tax Burden in Each State
LAO (Web Link) - California State-Local Finances
Fish (Chapter 4) - Demand for State and Local Govt. Services
Hub (Chapter 4) - Direct Democracy
Hub (Chapter 5) - Interest Groups
Bru (Chapter 1) - Introduction
LAO (Web Link) - Analysis of Propositions for Election March 2, 2004
Fish (Chapter 5) - Public Choice through Mobility
Fish (Chapter 6) - Sub national Government
Hub (Chapter 9) - Cities and Counties at the Crossroads
Bru (Chapter 2) - Local Taxation and American Federalism
Provision of State and Local Government Services
Fish (Chapter 7) - Costs and Supply
Fish (Chapter 8) - User Charges
Bru (Chapter 3) - Local Limits
Bru (Chapter 8) - Nontax Revenue Options
Bru (Chapter 9) - Financing Local Gov't in a Changing World
MIDTERM COST-BENEFIT PROJECT DUE
Provision of State and Local Government Services
Fish (Chapter 9) - Intergovernmental Grants
Fish (Chapter 10) - Borrowing and Debt
Hub (Chapter 10) - State Budget Crisis
PPIC (Web Link) - Californians and the State Budget
Fish (Chapter 12) - Principles of Tax Analysis
Fish (Chapter 14) - Economic Analysis of Property Tax
Bru (Chapter 4) - The Logic of the Property Tax
Bru (Chapter 5) - The Property Tax Under Siege
Bru (Chapter 10) - A Blueprint for Strengthening the Property Tax
Chapman, (Link), 1998, Proposition 13: Some Unintended Consequences
Fish (Chapter 15) - Sales and Excise Taxes
Fish (Chapter 16) - Income Taxes
Bru (Chapter 6) - Local Option Sales and Excise Taxes
Bru (Chapter 7) - Income and Business Taxes
Federation of Tax Administrators (Web Link) - State Tax Comparisons
Institute on Taxation and Economic Policy, (Link), 2003, California Taxes Poor at Highest Levels
LAO, (Link), 2001, California's Tax System: A Primer
Cut - Your Money or Your Life: Strong Medicine for America's Health Care System
California Health Care and Public School Reform
California Health Care Foundation (Web Link), Snapshot: California's Uninsured 2003
California Health Care Foundation (Web Link), Insurance Markets: What do Californians Buy if They Don't Buy Health Insurance?
California Health Care Foundation (Web Link), California's Health Insurance Act of 2003 (SB 2)
Lad - Market-Based Reforms in Urban Education
Lad (continued) - Market-Based Reforms in Urban Education
PPIC (Web Link) - Great Expectations: Reconciling CA's Academic Standards and School Resources
Chubb and Moe, (Handout), 1995, America's Public Schools: Choice is a Panacea
Robert Reich (Web Link), The Case for Progressive Vouchers
National Education Association (Web Link), Vouchers
B (1) - Reframing Immigration Debate
B (5) - Economic Benefits from Immigration
B (6) - Immigration and Welfare State
PPIC (Web Link) - California's Newest Immigrants
TAKE HOME FINAL EXAM GIVEN OUT
Background on Immigration Policy
B (7) - Social Mobility Across Generations
B (10) - Goals of Immigration Policy
B (11) - Proposal for Immigration Policy
Anderson, (Link), Muddled Masses
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