{"ModuleCode":"PP5203","ModuleTitle":"Behavioral Economics and Public Policy","Department":"Lee Kuan Yew School Of Public Policy","ModuleDescription":"Traditional economics, which is one of the key theoretical cornerstones of public policy, typically assumes that human behavior is rational, preferences are stable, and individuals are smart and unemotional. However, human behavior often deviates from standard assumptions due to psychological and social factors; analysis based on traditional economics can therefore misinform policies and lead to detrimental consequences. This course discusses behavioral regularities that are of potential importance for public policy. Students will be exposed to behavioral economic theory and its applications to public policy in the areas of savings, investment, healthcare, climate change, taxation, labor supply, and monetary policy.","ModuleCredit":"4","Workload":"3-0-0-3-4","Prerequisite":"PP5101 Economics and Public Policy I, or PP5301 Economic Reasoning and Policy, or PP5501 Economic Applications for Public Organisations","ExamOpenBook":true,"ExamDuration":"P2H","ExamVenue":"LKY SR3-1","Types":["Module"],"AcadYear":"2014/2015","History":[{"Semester":1,"ExamDate":"2014-11-28T09:00+0800","Timetable":[{"ClassNo":"L1","LessonType":"Lecture","WeekText":"Every Week","DayText":"Friday","StartTime":"0900","EndTime":"1200","Venue":"MMSR2-2"}],"IVLE":[{"Announcements":null,"Forums":[],"Workbins":[],"Webcasts":[],"Gradebooks":[],"Polls":[],"Multimedia":[],"LessonPlan":[],"ID":"5412ce15-43e8-421b-9031-54402f7f35b8","CourseLevel":"1","CourseCode":"PP5203","CourseName":"BEHAVIORAL ECONOMICS AND PUBLIC POLICY","CourseDepartment":"","CourseSemester":"Semester 1","CourseAcadYear":"2014/2015","CourseOpenDate":"/Date(1405180800000+0800)/","CourseOpenDate_js":"2014-07-13T00:00:00","CourseCloseDate":"/Date(1420041540000+0800)/","CourseCloseDate_js":"2014-12-31T23:59:00","CourseMC":"0","isActive":"N","Permission":"S","Creator":{"UserID":null,"Name":"Agnes Tan Swee Tin","Email":null,"Title":null,"UserGuid":"27c9192b-db6d-4316-a5db-8551996dce99","AccountType":null},"hasGradebookItems":false,"hasTimetableItems":true,"hasGroupsItems":false,"hasClassGroupsForSignUp":false,"hasGuestRosterItems":true,"hasClassRosterItems":false,"hasWeblinkItems":false,"hasLecturerItems":true,"hasDescriptionItems":true,"hasReadingItems":false,"hasAnnouncementItems":false,"hasProjectGroupItems":false,"hasProjectGroupsForSignUp":false,"hasConsultationItems":false,"hasConsultationSlotsForSignUp":false,"hasLessonPlanItems":false,"Badge":0,"BadgeAnnouncement":0,"WebLinks":[],"Lecturers":[{"ID":"8123756d-e441-4d88-9e0f-6588d0be0c63","User":{"UserID":null,"Name":"Chen Kang","Email":null,"Title":null,"UserGuid":"c60a631a-c49a-458f-919d-f0d172f17dc8","AccountType":null},"Role":"Lecturer ","Order":1,"ConsultHrs":null}],"Descriptions":[{"ID":"6e5f053b-8835-4692-be49-41f07234cfff","Title":"Syllabus","Description":"PP 5203
\nBehavioral Economics and Public Policy
\n 
\n 
\nTraditional economics, which is one of the key theoretical cornerstones of public policy, typically assumes that human behavior is rational, preferences are stable, and individuals are unemotional.  However, human behavior can often deviate from these standard assumptions due to psychological limitations.  Policy analysis based on traditional economics can therefore lead to wrong conclusions.  This course presents and discusses behavioral regularities that are of potential importance for public policy.  Students will be exposed to behavioral economic theory and its applications for public policy in the areas of savings, investment, healthcare, climate change, taxation, labor supply, and monetary policy.  The course helps to understand and appreciate how human psychological attributes, such as bounded rationality, bounded willpower, and bounded self-interest, can affect decision making; how behavioral considerations can help improve policy design and policy outcome; and how public policies can use the insights of behavioral economics more broadly.
\n 
\nPre-requisites:     PP5101 Economics and Public Policy I, or
\n                            PP5403 Economic Foundations for Public Policy, or
\n                            PP5801 Economic Analysis.
\n 
\nLecturer:         Professor Chen Kang
\n 
\nOffice:             Room OTH 03-01H
\n 
\nE-mail:             chenkang@nus.edu.sg
\n 
\nTel:                  (65) 6516 6194
\n 
\nOffice Hrs:       Wednesday 3:00pm to 5:00pm and Friday 3:00pm – 5:00pm. Please also feel free to call or use email to schedule an appointment.
\n 
\nLecture Time:  Friday 9:00 am – 12:00 noon (except during the shopping week)
\n 
\nLecture Venue: SR2-2
\n 
\nTextbooks:
\n                        
\n
    \n\t
  1. \n\t\tNick Wilkinson and Matthias Klaes (W&K), An Introduction to Behavioral Economics, 2nd edition 2012, Palgrave MacMillan.
    2. \n
\n 
\n
    \n\t
  1. \n\t\tDonald Low (ed.), Behavioral Economics and Policy Design: Examples from Singapore, 2012, World Scientific Publishing.
    2. \n
\nReferences:
\n 
\n
    \n\t
  1. \n\t\tAkerlof, G. 2002. “Behavioral Macroeconomics and Macroeconomic Behavior”, American Economic Review, 92: 411-433.
    2. \n
\n 
\n
    \n\t
  1. \n\t\tAkerlof, G. 2007. “The Missing Motivation in Macroeconomics”, American Economic Review, 97: 5-36.
    2. \n
\n 
\n
    \n\t
  1. \n\t\tAriely, D. 2008. Predictably irrational: the hidden forces that shape our decisions. London: HarperCollins Pub.
    2. \n
\n 
\n
    \n\t
  1. \n\t\tDella Vigna, Stefano. 2009.  “Psychology and economics,” Journal of Economic Literature, 47: 315-372.
    2. \n
\n 
\n
    \n\t
  1. \n\t\tJames, Simon. 2012. “The contribution of behavioral economics to tax reform in the United Kingdom”, Journal of Socio-Economics, 41: 468-475.
    2. \n
\n 
\n
    \n\t
  1. \n\t\tLaibson, D. 1998. “Life-Cycle consumption and hyperbolic discount factors”, European Economic Review, 42: 861-871.
    2. \n
\n 
\n
    \n\t
  1. \n\t\tManner, Mikko and John Gowdy. 2010. “The evolution of social and moral behavior: Evolutionary insights  for public policy”,  Ecological Economics, 69: 753-761.
    2. \n
\n 
\n
    \n\t
  1. \n\t\tOn, Amir, et.al. 2005. “Psychology, behavioral Economics, and public policy,” Marketing Letters, 16: 443-454.
    2. \n
\n 
\n
    \n\t
  1. \n\t\tSunstein, Cass, and Thaler, Richard. (2003). “Libertarian paternalism”. American Economic Review, 93(2), 175-179.
    2. \n
\n 
\n
    \n\t
  1. \n\t\tThaler, Richard. 1999. “Mental accounting matters”, Journal of Behavioral Decision Making, 12:183-206.
    2. \n
\n 
\n
    \n\t
  1. \n\t\tThaler, R. and Benartzi, S., 2004. “Save more tomorrow ™: Using behavioral  economics to increase employee saving”, Journal of Political Economy, 112(1) S164-S187 Part 2 Suppl.
    2. \n
\n 
\n
    \n\t
  1. \n\t\tThaler, Richard and Cass Sunstein. 2008. Nudge: Improving Decisions about Health, Wealth, and Happiness, New Haven: Yale University Press. 
    2. \n
\n 
\nAdditional references will also be used for group presentation.
\n 
\nAssessment:      Group presentation (20%);
\nTerm paper and presentation (40%);
\nOpen book final Examination (40%) (Two Hours).
\nTerm Paper:    The term paper will take the form of a short policy brief on one of the possible applications of Behavioral Economics in public policy design and implementation. The brief is expected to be no more than ten (10) double-spaced pages in length and should include, in addition to the main text, a short one (1)-page summary of the key points. By their nature, policy briefs need to be concise, and should have clear policy recommendations. It will be presented on 14 November 2014.
\n 
\nCourse Schedule for the Semester
\n 
\n\n\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\n\t\n
\n\t\t\t\tWeek\n\t\t\t\tDate\n\t\t\t\tTopics
\n\t\t\t\t 		\n\t\t\t\tAssigned Readings
\n\t\t\t\t1\n\t\t\t\tAug 15
\n\t\t\t\t 		\n\t\t\t\tIntroduction and Course Overview. (Shopping Week)\n\t\t\t\tW&K Chap 1
\n\t\t\t\t2\n\t\t\t\tAug 22
\n\t\t\t\t 		\n\t\t\t\tBeliefs, Heuristics and Biases\n\t\t\t\tW&K Chap 4, 11
\n\t\t\t\t3\n\t\t\t\tAug 29
\n\t\t\t\t 		\n\t\t\t\tLoss Aversion and the Endowment Effect\n\t\t\t\tW&K Chap 5
\n\t\t\t\t4\n\t\t\t\tSep 5
\n\t\t\t\t 		\n\t\t\t\tMental Accounting and Framing \n\t\t\t\tW&K Chap 6
\n\t\t\t\t5\n\t\t\t\tSep 12
\n\t\t\t\t 		\n\t\t\t\tProcrastination and Hyperbolic Discounting \n\t\t\t\tW&K Chap 7, 8, 9
\n\t\t\t\t6\n\t\t\t\tSep 19
\n\t\t\t\t 		\n\t\t\t\tFairness and Social Preferences \n\t\t\t\tW&K Chap 10
\n\t\t\t\t 
\n\t\t\t\t--RECESS WEEK—
\n\t\t\t\t 
\n\t\t\t\t7\n\t\t\t\tOct 3
\n\t\t\t\t 		\n\t\t\t\tTransportation Policies
\n\t\t\t\t 		\n\t\t\t\tLow Chap 3
\n\t\t\t\t 
\n\t\t\t\t8\n\t\t\t\tOct 10
\n\t\t\t\t 		\n\t\t\t\tEnvironment and Climate Change\n\t\t\t\tLow Chap 4
\n\t\t\t\t9\n\t\t\t\tOct 17*
\n\t\t\t\t 		\n\t\t\t\teLearning: Nudging or Budging\n\t\t\t\tOliver (2013)
\n\t\t\t\t10\n\t\t\t\tOct 24
\n\t\t\t\t 		\n\t\t\t\tFiscal Transfers and Taxation\n\t\t\t\tLow Chap 6
\n\t\t\t\t 
\n\t\t\t\t11
\n\t\t\t\t 		\n\t\t\t\tOct 31
\n\t\t\t\t 		\n\t\t\t\tHealth Decisions and Healthcare / Regulatory Reform\n\t\t\t\tLow Chap 7, 9
\n\t\t\t\t12\n\t\t\t\tNov 7\n\t\t\t\tLabor Market and Macroeconomic Policies
\n\t\t\t\t 		\n\t\t\t\tAkerlof (2002, 2007)
\n\t\t\t\t13\n\t\t\t\tNov 14*
\n\t\t\t\t 		\n\t\t\t\tPresentation of Term Papers\n\t\t\t\t 
\n
\n\t 
\nNote: This schedule of topics is flexible and time actually spent on each particular topic will depend on class interest.","Order":6},{"ID":"7374c1d2-a3c2-41b1-80db-932ab3b99f64","Title":"Preclusions","Description":"Nil","Order":9},{"ID":"b03cdb6d-6b5a-4f75-ace7-da73fc29b44f","Title":"Workload","Description":"3-0-0-3-4

Workload Components : A-B-C-D-E \r\n
A: no. of lecture hours per week \r\n
B: no. of tutorial hours per week \r\n
C: no. of lab hours per week \r\n
D: no. of hours for projects, assignments, fieldwork etc per week \r\n
E: no. of hours for preparatory work by a student per week","Order":10}],"ReadingFormatted":[],"ReadingUnformatted":[]}],"Lecturers":["Chen Kang"],"LecturePeriods":["Friday Morning"]}]}