PPA 220B – APPLIED ECONOMIC ANALYSIS II

PPA 220B – APPLIED ECONOMIC ANALYSIS II

GRADUATE PROGRAM IN PUBLIC POLICY AND ADMINISTRATION
CALIFORNIA STATE UNIVERSITY, SACRAMENTO

SPRING 2005

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., 2032 Mendocino 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 that 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) 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;

(5) 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 Amazon.COM;

(5) Local Tax Policy: A Federalist Perspective, David Brunori, Urban Institute Press, can be purchased at CSUS bookstore or click here to purchase at Amazon.COM.

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.

WebCT:

This course requires that you have access to the World Wide Web and WebCT. If you do not have an account at home or work that allows this, you can get one through CSUS. On WebCT I will post an outline of material covered in each meeting and a description of the homework that is due at the following meeting. These will be available by 4 p.m. on the Thursday night before the class meets. Discussion questions and answers should be submitted through WebCT. Your grades will be accessible through WebCT.

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 evaluative 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 hw questions related to the readings. There will be 12 of these hw assignments and only the top 9 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 analysis/prospectus on an element of a benefit-cost study of the Sacramento Water Forum. There will also be a final take home exam that is to be done independently with the assistance of one other classmate that I will designate. The final exam will contain three essay questions.

The course consists of one 170 minute meeting a week. We will take a 15-minute break at 7:30 p.m. By 4 p.m. each Thursday I require that you submit to the WebCT discussion board a well-developed question from readings assigned for that week. This question is not due the first time we meet, but will be due every subsequent time. (On the first night of class I will provide an example of a question that could have been written for the first meeting.) You will also be asked to complete written exercises. Paper copies of hw answers can only be turned in on the Thursday that they are due and by you (no exceptions or excuses accepted for missed classes). This policy acts as a form of attendance. I will assign an overall grade of "A", "A-", B+", ..., "C", "C-", or "F" (not turned in) for each of these weekly assignments.

The student question on what they did not understand from that week’s reading should be submitted to the discussion board on WebCT. By the following Thursday, each student is required to choose another student’s question (on a first-come-first-serve basis) and provide a written answer to the discussion board. (Note that this is not required for January 27 meeting.) Do your best at answering the question by referring to the discussion we had in class on it and where it is covered in texts. If you can still not answer, please call me or stop by during my office hours and I will help you with it.

All submissions of this type should be labeled in the subject portion of posting as Thursday date followed by last name. As an example, if I submitted a question on first date that it is due it would be labeled “Feb3Wassmer”. When another student, say John Smith chose to respond to my question by Feb 10 at 5 p.m. the next week, his threaded response would be labeled “Feb3WassmerSmith”. Your grade each week on this assignment will be based upon both the quality of your question and the quality of your response to another’s question.

This class will 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 call on students, so be prepared.

Schedule:

This class will meet a total of 14 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", Brunori by "Bru", Ladd by "Lad", and Cutler by "Cut".

Meeting 1 (Jan. 27)

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