ECN435 Data-Driven Public Policy

• Topics

  Should there be a wealth tax? How generous should social insurance benefits, like unemployment benefits, be? Is a universal basic income a good idea? How can we combat climate change? These pressing public policy questions seem unrelated but as you will learn in this course one can think about these issues as an optimal tax problem. This course discusses the tools of public economics to thoroughly analyze the above-mentioned questions and puts particular emphasis on data analysis to provide evidence-based policy recommendations.

  The teaching block of this course is divided into four parts:

  • Taxation and Inequality, with a special focus on wealth taxes.
  • Social Insurance.
  • Universal Basic Income.
  • Climate Change.

  The course will give students an introduction to frontier research and policy applications in public economics in a manner that makes the course suitable both for students starting a major in economics, as well as for students exploring economics as a supplement to their profile. In the context of these topics, the course will provide a non-technical introduction to both basic public economics theory and basic methods in data analysis, including causal inference and machine learning. The course should equip students with tools to thoroughly analyze data and public policy questions as well as enable students to provide evidence-based policy recommendations.

  The teaching block will take place in the first half of the semester with classical lectures, in-class discussions, and problem sets. In the second half of the course, students work out a research proposal on any topic of their choice. Students will present an early version of their proposal and receive repeated feedback. The idea of the research proposal is that students use this opportunity to develop ideas for their Master thesis and learn how to answer a question of their choice in a structured way.

• Learning outcome

  Knowledge

  Upon completion of the course, the student…

  • knows the public economics framework to evaluate policies (equity vs. efficiency trade-offs)
  • knows how data can inform policy discussions / answer research questions
  • understands empirical methods for testing the implications of theoretical economic models, evaluating policies, and knows how to interpret the results.

  Skills

  Upon completion of the course, the student can…

  • analyze the impact of various public policy proposals and evaluate their sustainability
  • analyze the economic and social consequences of public policy reforms
  • formulate a research question of their choice and develop a plan to answer this question in a structured way.

  General Competence

  Upon completion of the course, the student can…

  • debate public policy issues in a structured way
  • evaluate consequences of government policies
  • provide evidence-based policy recommendations
  • present research proposals.

• Teaching

  Plenary lectures on campus, labs, assignments, and class presentations in groups.

• Recommended prerequisites

  None.

• Required prerequisites

  None.

• Credit reduction due to overlap

  None.

• Compulsory Activity

  None.

• Assessment

  The final grade will be based on

  1. Individual written 2-hour at home exam (50%) that will take place midterm.

  2. Term paper in groups of 1-2 students (50%): Students develop a research proposal of at most 3-4 pages that outlines a clear research question, motivates the relevance of the research question and presents a plan to answer the research question (what methods are suitable to answer the research question, what data is needed). The research proposal has to be handed in by the end of November. Students are expected to present their proposal in class during the semester and will receive feedback on their ideas/proposals. The presentation does not count towards the grade.

  Language: English.

• Grading Scale

  A-F

• Computer tools

  Stata, R

• Literature

  Papers.