New Developments in Public Economics
New Developments in Public Economics
Content: This course approaches new developments in Public Economics by asking how Behavioral Economics promotes our way of thinking about Public Economics.
Public Economics traditionally addresses issues like government taxation and spending, health economics, and education economics, including efficiency-based reasons for the public provision of goods and market regulation by the government. In a broader perspective, public economics also covers all aspects of public policy and political economy. In modern political economics, the state is no longer the welfare state but consists of elected political agents that pursue their own interests, too.
Behavioral Economics incorporates insights of psychology (both targeting the individual as such and the “social animal”) into economics to make economics a more powerful science of human behavior.
Method: This course is a combination of lecture and seminar. It consists of one introductory lecture and three subsequent topic blocks of several sessions each. The blocks are on (1) redistribution, (2) public policy, and (3) taxation. In the first session of each block, I will give a lecture on the topic of the current block. In the subsequent sessions within the block, students will present and discuss recent research in the relevant topic of behavioral public economics in class. They also provide short papers which summarize and critically reflect on selected recent research.
Aim: Students learn to be critical consumers of current research in Behavioral Public Economics. Students learn to contrast the empirical and theoretical findings in this fresh field with conventional approaches and results in selected topics of Public Economics. Students critically reflect on the challenges for theory and policy applications of conventional Public Economics. The course provides ample opportunity for students to foster their presentation, writing and debating skills and may help identifying a suitable research question for the master thesis.
Requirements: Participants should have taken an introduction to Public Economics, for example the lecture “Finanzwissenschaft” usually held by Andreas Lange at UHH, or a comparable lecture at some other university.
Organization: Depending on the number of participants, students will present and discuss papers individually or in work groups (max. 2 students). A typical plan for a session is 30’ presentation, 15’ questions for clarification, 45’ general discussion. Students working in groups are individually graded insofar as their individual performance can be clearly assessed. Otherwise, all students in a group get the same grade. We determine the “Group in Charge” for each session/topic in the first session. It is therefore imperative to participate in the first session where I briefly summarize the materials of the course, students form groups and pick which ones to present. Students who cannot (for a good reason) participate in the first session should send me an e-mail by 6 pm on the day before the first session naming at least three papers from the reading list which they are committed to present.
Each part i) to iv) below is graded on a scale 1 to 5 and the final grade is the weighted average of these grades according to the weights indicated below.
- i) Present. The Group in Charge presents the paper(s) they were assigned in about 30’ per paper and answers questions for clarification by the participants and the instructor (about 15’ per paper). Send me your slides by e-mail. Deadline: 6 pm on the day before the presentation (35% of final grade). To be posted on Moodle. See separate guidelines.
- ii) Submit comments and questions. Each individual student (this is not group work) submits a short summary in his or her own words (max. 1 page) and questions to two papers presented by others (max. 2 comments or questions per individual). Briefly comment on your question (i.e. provide a short motivation for why the question may be relevant or interesting to discuss, max. 1 page per question). Raise these questions in class to structure and guide the general discussion of the paper. Deadline: 5 pm three days before the respective course session (i.e., 5 pm on the Monday before the respective course session), by e-mail to me (35% of final grade. Two best shots count). Questions will be posted on STiNE. The Group in charge is supposed to have a look at the questions and think of possible answers.
- iii) Discuss. Grading is also based on active participation. Students must not miss more than two sessions else they are graded “fail” on this part (10% of final grade).
- iv) Submit and present a proposal (in groups of max. 2 students) on how to apply behavioral insights to increase tax compliance and reduce tax evasion. Imagine you were responding to a call by the German Ministry of Finance to submit a concise proposal for implementing an “evidence-based” policy measure to increase tax compliance and reduce tax evasion (both of individuals and firms) in Germany. Provide a description of the measure you suggest, briefly explain why you expect it to work (possibly with reference to some scientific literature), and describe an experiment / pilot phase to test the effectiveness of the measure before it is implemented on large scale. Deadline for handing in: 19.1.2016, 6 pm (max. 3 pages). Present it on February 09, 2017 (oral exam). 20% of final grade.