[http://cameron.econ.ucdavis.edu/e132/e132syl.html]

Department of Economics, University of California - Davis

SPRING 2022

SYLLABUS

Professor Colin Cameron, 1124 Social Sciences and Humanities

Email: accameron@ucdavis.edu Website: http://www.econ.ucdavis.edu/faculty/cameron

**Meeting: **Tues Thurs 9.00 - 10.20 am
Wellman 106 **(In person)**

**Office Hours: **Tuesday
2.00 - 3.30 pm (in
person at SSH 1124)

Wednesday 2.00 - 3.30 pm (zoom plus I will usually be
zooming from my office)

**Teaching Assistants:**

Eunju Lee ejulee@ucdavis.edu

Office hours: Tuesday 4.00 - 5.00 pm (in person at SSH
116)

Tuesday 5.00 - 6.00 pm (remote by zoom)

Natalia Orlova norlova@ucdavis.edu

Office hours: Tuesday 11.00 -noon (in person at SSH 116)

Thursday noon-1.00 pm (remote by zoom)

**Discussion Sections:
**

A03: Wednesday 12.10 - 1.00 pm Hutchison 93 Natalia Orlova

A04: Wednesday 1.10 - 2.00 pm Hutchison 93 Natalia Orlova

The course goals are:

(1) Provide a detailed description of the institutional features of the health care market and current trends in this rapidly changing field;

(2) Demonstrate the use and usefulness of analyzing the health care market using economic analysis, particularly microeconomics, and some statistical/mathematical analysis.

Compared to other areas of economics, health economics is complicated by a lack of information (about what health services the consumer needs), great uncertainty (hence insurance) and payment through third-parties (insurance companies) rather than direct payment by the consumer.

(3) Analyze health data using regression methods and the statistical program Stata.

**Pre-requisites:**

Economics 100 or 100A or ARE 100A (intermediate microeconomics) or
consent of instructor.

Mathematics 16A-B: These are a
pre-requisite for Economics 100/100A.

**Regression class **(upper division): one of
Economics 102, Economics 140, ARE 106, Statistics 108 or consent
of instructor.

**COURSE OUTLINE: **

**A. **Introduction, Overview of U.S. Health
Market, getting started in Stata

Class 1. Supplemental Notes. (Bhattacharya
Chapter 1)

**B. **Health Insurance in the U.S.: Facts,
definitions and Rand experiment

Classes 2-3. Supplemental Notes.
(Bhattacharya Ch.18)

**C. **Economics of Health Insurance:
Risk pooling, risk aversion, moral hazard

Classes 4-7. Supplemental Notes.
(Bhattacharya Chs.7, 8, 9.11-9.12)

***** Class 8 Midterm Exam 1 *****

**C. **Economics of Health Insurance: adverse
selection, other countries

Class 9. Supplemental
Notes. (Bhattacharya
Chs.11)

**D****. **Economic Evaluation of Health
Services: cost-benefit and cost-effectiveness analysis

Classes 10-11. Supplemental
Notes. (Bhattacharya Ch.14)

**E. **Demand for Health Care: Grossman model

Class 12. Supplemental Notes. (Bhattacharya
Chs.2-3)

**F****. **Suppliers:
Physicians

Class 13. Supplemental
Notes. (Bhattacharya Ch. 12)

***** Class 14 Second Midterm exam

**F****. **Suppliers: Hospitals,
pharmaceuticals

Class 15-16. Supplemental
Notes. (Bhattacharya Ch. 12)

Class 17. Supplemental Notes. (Bhattacharya Ch. 20)

Class 18

Class 19. Supplemental Notes. (Bhattacharya Ch. 15)

Class 20. Review of Course

This includes complete slides for the course (under Files / Lecture slides) and assignments (under Files / Homeworks)

Additionally, some past exams and solutions are at http://cameron.econ.ucdavis.edu/e132/e132.html

Stata for regression:

The discussion sections are in university computer labs and the first discussion section will be on getting started in STATA.

Stata is installed in **93 Hutchison**, **2101 SCC,** and
the **Virtual Lab** (evenings and weekends when labs are
closed - see https://virtuallab.ucdavis.edu)

**To see whether ****93 Hutchison and 2101 SCC are available see**
**https://computerrooms.ucdavis.edu/available/**.

To get
started in Stata see http://cameron.econ.ucdavis.edu/stata/stata.html

If
you choose to purchase Stata go to https://www.stata.com/order/new/edu/gradplans/student-pricing/

For this course and other economics classes Stata/IC is more
than adequate and costs $48 (6 months), $94 (1 year); $225
(permanent copy).

To install Stata after it is purchased:

(1) Choose the correct operating system (e.g. Windows or Mac);

(2) Choose the correct version of Stata - the student price
version is Stata/IC;

(3) When you first run Stata after installation it will ask
for an "authorization code". These codes are given in a pdf
attachment you will received in the email from Stata following
purchase (some codes are lengthy and it is easiest to cut and
paste them in).

To get started in Stata see http://cameron.econ.ucdavis.edu/stata/stata.html
and especially
http://cameron.econ.ucdavis.edu/stata/stataintro.html

Discussion sections will include going through Stata.

For a summary of the data methods we use see file
tr132statistics.pdf at the Canvas site (under **Files
/ Statistics for 132**)

If you want more on regression and Stata I have a low-priced
text http://cameron.econ.ucdavis.edu/aed/

**Midterm Exam 1:
20% 9 .00 am Thursday April
21 In-class exam **

Assignments: 20% Due 10.00 a.m. Fridays

**Assignments** are posted on Canvas under **Files
/ Homeworks**.

They are to be turned in as a **single pdf file** on Canvas
under **Assignments** by 10 am on Fridays (except a
Wednesday for Assignment 6).

For how to include Stata results see USING STATA AND SAVING
RESULTS.pdf posted on Canvas
under **Files / Homeworks.**

Doing the assignments is a valuable part of
learning both health economics and data analysis using
Stata.

Assignments will usually be graded satisfactory (4%) or
unsatisfactory (0%). Satisfactory means a serious attempt to
answer at least 80% of the questions. In some cases partial credit will be given.

The lowest of the scores on the six assignments is
dropped, i.e. no penalty for not handing in one assignment if
the other five are graded satisfactory.

Assignments must be handed in on time, so solutions can be
discussed in class and distributed in a timely manner. No
credit for late assignments.

**Exams** are closed book with a mixture of
short answer (mostly) and multiple choice.

Some past exams are posted at http://cameron.econ.ucdavis.edu/e132/e132.html

**The final exam is comprehensive**: approximately
20% on material up to first midterm, 20% on material between
first and second midterm, 45% after second midterm; and 15% on
regression with Stata.

**Scores **are posted at Canvas. You
have one week from when work is first returned in class (or in
discussion section in the case of assignments), to raise any
questions about grading.

**Note that there is no automatic conversion
formula such as an 85 is a B.** To let you know how you are
going on each exam I give the distribution of the scores for the
exam along with a "suggestive" grading curve. The course grade is based on the total course score and has a similar
distribution of A's, B's, etcetera.

**Course grade** is determined by the total
score, with weights given above. The assignments are graded on a
generous scale (satisfactory or unsatisfactory), so many
students will get full credit on the assignment portion.
Therefore for most students the course score is determined by
scores on the exams. To indicate your progress I give a grade on
each midterm. But the final grade is determined by summing the
exam and assignment scores (and not by averaging the grades).

(1) All undergraduate and graduate course outlines (syllabi) should list or provide a link to the U.C. Davis Code of Academic Conduct which is at https://ossja.ucdavis.edu/code-academic-conduct. This provides many leading examples of academic misconduct. You should read this.

(2) One specific example of academic honesty is copying from solutions to assignments given in previous 132 courses.

(3) If an instructor has a reasonable suspicion of academic misconduct, whether admitted by the student or not, the instructor shall report the matter to the Office of Student Support and Judicial Affairs.

(4) The instructor has authority to determine a grade penalty when academic misconduct is admitted or is determined by adjudication to have occurred; with a

maximum grade penalty of “F” for the course.

Note that Student Support and Judicial Affairs may separately impose sanctions for academic misconduct, including community service, suspension and dismissal.

The most common form of academic misconduct in Economics 132 is copying from past assignment solutions or copying (close to exact or exact) from other students.

Students found copying will automatically be reported to Student Support and Judicial Affairs. In addition to any penalty SSJA give, the most common grading penalty for doing so will be to receive zero for that assignment and additionally reducing the course grade by one grade (examples: a B becomes a C, or a B- becomes a C-).

It is very easy for copying on assignments to be detected. In Fall 2018 there were 15 out of 96 students in ECN 132 reported to Student Support and Judicial Affairs. Penalties included suspension for one, two and three quarters. If you do not have time to do the assignment yourself then just don't do it.