Methods for the evaluation of public policies
[ECON2352]
[30h] 5 credits
Teacher(s): William Parienté
Language: French
Level: Second
Aims
The first part of the course (the most important one) introduces to (social) cost-benefit analysis of public poli-cies. It consists in evaluating whether the impacts caused by some policy induce more benefits than costs (as-suming that one can measure the impacts for society in monetary terms). The course demonstrates how the analysis can not only take efficiency criteria into account, but also equity. At the end of the lectures, the student should be capable to realise a cost-benefit analysis on real cases.
A cost-benefit analysis can only be realised to the extent that one has access to a reliable estimation of the pol-icy impact. If time permits, the second part of the course introduces the student to estimation methods of the "causal" policy impact. This part will build on the methods treated in the micro-econometrics course of the "tronc commun". By the end of the course the student will be able to implement the estimation methods on real data.
Main themes
The second part is devoted to learning estimation methods of causal policy impacts on the variable of interest. It will discuss (i) the fundamental problem of evaluation: the impossibility of observing the "counterfactual" (= what would have been realised in the absence of the policy); (ii) the statistics of interest (average treatment ef-fect, distribution of the treatment effect, ) and the identification problem; (iii) estimation methods.
The lecturer takes care that the theoretical notions are implemented in practical exercises applied to a variety of public policies: public works, health care, education, labour market, etc. The students apply the methods of analysis to concrete examples. If possible, one or two experts are invited to expose the realisation of cost-benefit analysis within the framework of their professional experience.
Content and teaching methods
The second part treats the estimation of the "causal" impact. The lectures will be based again on transparency presentations and reference texts. The course will just expose the details of one estimation method: the method of "matching". The student learns how this estimation method can be implemented in practice.
The last part of the course is devoted to the preparation of a cost-benefit report applied to a practical exercise, based on real data, that is imposed by the lecturer. To this purpose, the lecturer prepares an outline for analysis. Following this outline, the students will implement the theoretical concepts to a concrete problem. The lecturer will be available to help the students solving the problems to which they are faced during the preparation of the report.
Other information (prerequisite, evaluation (assessment methods), course materials recommended readings, ...)
Microeconometrics : course of the core ("tronc commun") of the general orientation of the master 120 in economics.
A written exam with oral defence. The exam consists partly in a practical task prepared in small groups during the last part of the course. The remaining part contains questions on theory and applications. The oral exam is personal and aims at obtaining a comple-mentary judgement on the ability of fulfilling the practical task and on the responses given to the written exam.
Certain chapters of the book of Layard R. and S. Glaister (2003), Cost-Benefit Analysis, Cambridge University Press and certain parts of the article of Treich, N. (2005), "L'Analyse Coût-Bénéfice de la Prévention de Risques", mimeo, Université de Toulouse, complemented by transparencies and texts written by the lecturer.
The students will be assisted in the elaboration of their practical task.