- Student Records
Programme & Unit Catalogues

ES20068: Public finance 2

Follow this link for further information on academic years Academic Year: 2013/4
Further information on owning departmentsOwning Department/School: Department of Economics
Further information on credits Credits: 6
Further information on unit levels Level: Intermediate (FHEQ level 5)
Further information on teaching periods Period: Semester 2
Further information on unit assessment Assessment: EX 100%
Further information on supplementary assessment Supplementary Assessment: ES20068A Re-sit Examination (where allowed by programme regulations)
Further information on requisites Requisites: Before taking this unit you must take ES10001 and take ES10005 and take ES20019 and while taking this unit you must take ES20012
Further information on descriptions Description: Aims:

* To enable students to apply principles of microeconomics to analyse public finance theory.
* To enable students to understand and assess policy issues in public finance.
* To make students aware of the different schools of thought in public finance.
* To enable students to understand and to assess 'cost benefit' analyses of public expenditure programmes.

Learning Outcomes:
At the end of the course unit students should be able to:
* Apply microeconomic theory rigorously to assess theoretical issues in public finance.
* Understand and evaluate policy debates in public finance.
* Apply theory to assess reform of public spending and taxation against a set of criteria (which includes efficiency and equity).
* Understand how microeconomic theory can be applied to explain dissonance between policy prescription and policy adoption.

The following are facilitated and assessed: Abstract reasoning; information synthesis; diagrammatic skills; writing skills; numeracy skills.

Public Finance 1 provides a thorough introduction to the way that normative neoclassical theory can be applied to analyse taxation. Public Finance 2 considers other approaches to public finance theory and introduces analysis of public expenditure.
In the first part of the unit:
(i) a different application of microeconomic theory is applied to explain the policies governments adopt (a 'public choice' approach is introduced);
(ii) new developments in 'behavioural public finance' are introduced (e.g. new developments in behavioural economics are introduced to explain tax compliance).
In the second part of Public Finance 2 the focus is on public spending. The rationale for public spending is assessed. Criteria for evaluation of public expenditure are discussed. Techniques for evaluation of public expenditure (e.g. Cost Benefit Analysis) are examined. Problems of 'shadow pricing' are illustrated (e.g. with reference to the question of whether it is possible to value human life). The appropriate social discount rate is considered (for analysis of investment in the public sector).
Key texts:
* Cullis, J. and Jones, P. Public Finance and Public Choice, third edition (Oxford University Press, 2009).
* Mishan, E. J. and Quah, E. Cost Benefit Analysis fifth edition (Routledge, 2007).
* Hindricks, J. and Myles, G. Intermediate Public Economics (MIT press, 2006).
Further information on programme availabilityProgramme availability:

ES20068 is Optional on the following programmes:

Department of Economics
  • UHES-AFB03 : BSc (hons) Economics (Full-time) - Year 2
  • UHES-AKB03 : BSc (hons) Economics (Full-time with Thick Sandwich Placement) - Year 2
  • UHES-AFB02 : BSc (hons) Economics and International Development (Full-time) - Year 2
  • UHES-AKB02 : BSc (hons) Economics and International Development (Full-time with Thick Sandwich Placement) - Year 2
  • UHES-AFB01 : BSc (hons) Economics and Politics (Full-time) - Year 2
  • UHES-AKB01 : BSc (hons) Economics and Politics (Full-time with Thick Sandwich Placement) - Year 2

* This unit catalogue is applicable for the 2013/4 academic year only. Students continuing their studies into 2014/15 and beyond should not assume that this unit will be available in future years in the format displayed here for 2013/14.
* Programmes and units are subject to change at any time, in accordance with normal University procedures.
* Availability of units will be subject to constraints such as staff availability, minimum and maximum group sizes, and timetabling factors as well as a student's ability to meet any pre-requisite rules.