APEC 822	Mike Hammig
Contemporary Public Policy	220 Barre
Spring 2007	656-3225

Course Objective:

To develop an understanding of the application of economic principles to the public policy decision-making process, particularly with respect to the rural sector and the natural resource issues. Topics include an introduction to welfare economics theory, a review of the fundamental economic criteria for making public judgments with respect to political issues, and methods of applied applications of economic theory to public policy decision-making.

Extensive readings will be taken from:

Just, Richard E., Darrell L. Hueth, and Andrew Schmitz. Applied Welfare Economics and Public Policy: A Practical Approach to Project and Policy Evaluation, Northampton, MA: Edward Elgar, 2004.

Several other readings related to specific topics addressed during the semester will be assigned.

Course Outline:

I. Why have policy?

II. Welfare economics theory

A. The fundamental theorems of welfare economics i. Pareto optimality and competitive equilibrium ii. Compensation principles iii. The social welfare function iv. Consumer and producer surplus B. Application of welfare criteria to policy alternatives i. Welfare analysis of market oriented policies ii. Welfare analysis and general equilibrium iii. Welfare analysis of imperfect competition iv. Welfare analysis in uncertain markets C. Applications of welfare economics in non-market situations i. Determination of optimal levels of pollution ii. Determination of optimal resource use III Measurement issues with respect to non-market valuation i. Valuation techniques--travel cost, hedonic pricing, contingent valuation ii. Application of contingent valuation to a resource management issue

The following material has been covered in this course in the past. Depending on the interests of students, the focus of these secions may change.

III. Economic policy of international trade

A. Externalities and trade B. Elasticity of excess demand C. Measurement of trade distortions

IV. Economic policy and developing countries

A. Policy analysis matrix B. Case study of PAM application

V. Common Property Resources

A. The classic fisheries problem   B. Coasian vs. Pigouvian control

VI. Economic policy and technological change in the global economy

A. Green Revolution   B. Biotechnology

Statement of course policy:

Class attendance is at the discretion of the student. Two exams and a final exam will be given, the two given during the term will each be valued at 50 points, the final will be valued at 100 points. A term paper, also worth 100 points, will be required. The final grade will be based on the cumulative scores of the exams and the term paper.

This is a preliminary syllabus. The official syllabus is the one distributed in class.

Spring 2007 Course List    AE & S Home

2007 by Michael D. Hammig, Professor, Department of Applied Economics & Statistics, Clemson University, Clemson, SC 29634-0313.

updated 2/28/07