Master AMSE, Aix-Marseille School of Economics # Speciality Public economics # Public economics / Track Public policy analisys and philosophical foundations

RESPONSABLE

AIM

This track provides the all-round economics training needed to undertake research projects in the field of public policy evaluation. At the end of the programme, students can obtain posts as researchers ; as research officers in ministerial research departments (DREES, DARES) or in major public organisations (Bank of France, INSEE, Conseil d’Analyse Stratégique), research officers in public observatories (Observatoire Nationale de la Pauvreté et de l’Exclusion Sociale, OFCE), unions, associations, think tanks and other interest groups influencing public action ; as project officers in governing councils or municipalities.

Expert evaluation openings can also be found in international bodies (IMF, World Bank, OECD) and in non-governmental organisations responsible for social policy or projects in the developing countries. Independent experts are often required for this kind of evaluation, creating a sizeable market for economists specialised in the field.

This track also aims to provide a solid foundation in economics for students wishing to pursue careers in political and economic journalism, or to manage projects requiring input from public stakeholders.

LINKS WITH RESEARCH

This Master’s is backed by the AMSE Labex (research excellence) which combines almost one hundred researchers from AMU, CNRS, INSERM, EHESS, IRD and ECM with the three economics research centres : Greqam (UMR 7316), Sesstim (UMR 912) and Institut d’économie publique.

PLAQUETTE DE LA FORMATION

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PROFESSIONAL SKILLS

Students will develop all the skills needed to analyse public policy. At the end of the programme, students will be able to draw on rigorous theoretical and conceptual training (public sector economics, econometrics, economic philosophy) as well as powerful empirical tools (methods of evaluation, statistical analysis, social-fiscal system simulators).

The programme also provides practical working knowledge of fiscal affairs, social affairs, housing policy, local policy and development policy.

INTERNSHIPS AND SUPERVISED PROJECTS

During the second part of the M2 year, students either do an internship or write a Master’s thesis.

The internship can be carried out in a firm, in a public authority or in an institution whose activities are compatible with the student’s skills. The objective of the placement is to show an ability to apply the conceptual tools acquired during the Master’s to issues arising in the professional world. The student must therefore identify the issue, apply the tools and satisfactorily communicate the results to both professionals and academics. The internship is supervised by a university staff member and by an internship supervisor from the company or authority. The organisation suggests the topic, which the student summarises in one page, subject to university approval as an M2 internship topic. At the end of the internship, the student writes an internship report, which must be defended before a jury composed of two members of the Master’s teaching staff, one of whom must be the university internship supervisor, together with the in-house internship supervisor if possible.

Students intending to purse PhD studies can choose to write a Master’s thesis as an alternative to the internship. This can be done at one of the AMSE research centres (Greqam-UMR 7316, Sesstim-UMR 912 and IDEP-Institut d’économie publique). It will entail identifying an economics research question, exploring the relevant literature and making an original contribution to it.

PLAQUETTE DE LA FORMATION

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EVALUATION AND EXAMS

Students’ knowledge will be assessed for each course by written or oral examination. Practical procedures for this examination will be as defined by the General Examining Regulations of the establishment. The means of assessment will be reviewed annually, following the recommendations of the management committee of the Master’s.

Semester 3 (30 ECTS)

Common core (6 ECTS)

Applied economics problems I

CONTENT

The objective of the course is to train students to think as economists. To this end the course choses two distinct topics, which correspond to two distinct parts of the course : Part I : ‘globalisation and inequality’, Part II : ‘The Arab Spring’. The topics are of interest to many but should be seen as tools to serves the purpose of the intellectual exercise of studying a phenomenon using economic thinking.

Course overview :

Part I.

Chapter I.1 : Facts and empirics on institutional change and development

Chapter I.2 : Benchmark theories : democratization games

Chapter I.3 : Understanding the Arab spring

Part II.

Chapter II.1 : Technical change, commercial integration on the skill premium.

Chapter II.2 : Economies of scale, commercial integration on the skill premium.

Chapter III.3 : Assortative matching, commercial integration and the skill premium.

PDF brochure.

Applied economics problems II

CONTENT

One of the principal challenges in empirical work in economics is the fact that many datasets are not random samples. Self-selection by optimising agents renders most observable data unrepresentative of the population of interest. Observed data and theoretical populations differ, leading to the confounding selection biases.

We will first examine the economic forces that lead to the presence of selection biases, and study there effects. We then consider under which conditions we can overcome this challenge, and consider in detail the classic and Nobel-prize winning Heckman procedure.

Course overview :

Selection biases (i) Origins, and consequences.

(ii) Proposed remedies,

(iii) Practical illustrations.

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Advanced public economics (9 ECTS)

Inequality and social justice

CONTENT

The course presents some of the methods used by economists for comparing societies on the basis of their performance in allocating various attributes (incomes, health, well-being, etc.) among their members. It focuses on the theoretical foundations of the methods, by connecting them to modern theories of justice. A particular emphasis is devoted to robust dominance methods that are consistent with a wide range of ethical beliefs.

Course overview :

1. Introduction, motivations and examples

2. Modern theories of distributive justice :

- Arrovian social choice theory

- Welfarist escape from Arrow’s theorem

- Non-welfarist escape from Arrow’s theorem

3. Comparing distributions of one attribute :

- Efficiency criteria, efficiency measures.

- Equality criteria, inequality indices

- Combining efficiency and equality : robust dominance criteria.

4. Comparing distributions of several attributes :

- Statistical dominance

- Poverty dominance

- Welfarist dominance

- Elementary transformations

5. Fair social choice

PDF brochure.

VOLUME OF TEACHINGS

  • Lectures: 24 hours

Political economy of redistribution

CONTENT

This course first aims to cover the fundamental notions of Political Economy and in particular models of voting applied to redistributive policies ; we then address recent developments in welfare economics and the question of individual preference heterogeneity (measured by the revealed preference approach or by subjective well-being data) for a normative analysis using equivalent incomes (fair social choice) or “capabilities” ; the course ends with the revelation of social preferences for redistribution.

Courses overview :

I. A short historical review : from classic to modern Political Economy

  • Philosophical foundation, Political Economy and Political Philosophy
  • Utilitarism, Welfarism and Social choice
  • Political Economy today

II. Political Economy and redistribution : positive theories

  • Theories of the public sector : justification, size
  • Voting : efficiency, stability, Arrow’s impossibility
  • Voting : general framework
  • Majority voting : restricting preferences, applications to redistribution
  • Majority voting : restricting institutions
  • Probabilistic voting

III. Welfare Economics : normative aspects and recent empirical advances

  • SWF, interpersonal comparability
  • Measuring preference heterogeneity : revealed preferences, subjective well-being
  • Accounting for preference heterogeneity : income equivalent and fair social choice, capabilities

IV. Revealing Redistributive Preferences

  • Redistributive preferences : theories
  • Tax-revealed redistributive preferences
  • Empirical social choice

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VOLUME OF TEACHINGS

  • Lectures: 24 hours

Economics of taxation

CONTENT

Taxation is one of the most prevalent ways for the Government to intervene in the economic sphere. The aim of the course is to give an overview of the main issues of taxation in a compact format. Deep results will be proved and will please students interested in theory. Perspectives on applied issues for econometricians are also offered. Considerations on fiscal policies will pepper the course.

Course overview :

1 : Why and What taxes ?

2 : Principles of Taxation

3 : The Effect of Taxation on Behaviour

4 : Incidence of Taxes

5 : Optimal Taxation in a closed Economy

6 : Family taxation

7 : Tax competition in an Open Economy

8 : Optimal taxation in an Open economy

9 : Capital Taxation

10. Dynamic optimal Taxation

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Public policies evaluation methods (6 ECTS)

Econometrics of the labour market

CONTENT

The aim of this course is to familiarise students with the principal techniques used in empirical labour economics. Each technique will be introduced and developed in the context of themes that figure prominently in labour economics.

Course overview :

1. Earnings Linear regression revisited ; equation specification ; variable representation ; Oaxaca decomposition ; endogeneity issues ; instrumental variables ; estimation with panel data.

2. Labour supply Linear probability, logit and probit ; Oaxaca decomposition for nonlinear models ; sample selection issues ; multinomial models.

3. Labour market programme evaluation Average treatment effects ; natural experiments ; differences-in-differences ; selectivity bias ; matching.

4. Unemployment duration analysis Survivor and hazard functions ; parametric modeling of duration dependence ; Oaxaca decomposition for duration models ; different sampling schemes – stocks and flows ; proportional hazards ; discrete duration data

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VOLUME OF TEACHINGS

  • Lectures: 24 hours

Econometrics of treatment effects

CONTENT

To advance students’ understanding of the econometrics of treatment effects. We will provide refreshers on standard evaluation methods (experimental and non-experimental) taught in previous M1 course and offer extensive practice on STATA. We will discuss some advanced topics based on research articles.

Course overview :

  1. Refresher on the potential outcome framework
  2. Treatment effects methods (experimental and non-experimental)
    1. Theory
    2. Practice
  3. Advanced topics
    1. SUTVA
    2. Distribution of treatment effects
    3. Relation to structural econometrics

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Advanced courses (6 ECTS)

Economics of social networks

CONTENT

The course will present the fundamentals of a fast-growing new field of research : the economics of social networks. I will introduce main network notions and key models of stochastic networks. I will discuss in some details three classes of economic processes where networks matter : peer effects, informal transfers and jobs.

Course overview :

The course is divided in 6 parts :

1. Introduction.

A new field of research. Reasons behind its emergence. Examples of networks. Overview of the field.

2. Elementary network notions.

Adjacency matrix. Types of networks. Examples. Specific networks. Degree. Density. Walks. Paths. Cycles. Components. Shortest paths. Diameter. Clustering. Homophily.

3. Stylized facts and stochastic networks.

Sparseness, giant component and Erdos-Renyi. Small diameter, high clustering and small-world networks. Fat tails in degree distribution and preferential attachment. Homophily.

4. Peer effects and games played on networks

Sources of correlations between peers’ outcomes. Simultaneity and strategic interactions. Continuous outcomes and small interactions. Bonacich centrality. Large interactions and bounds. Binary outcomes. Econometric issues : identification, estimation.

5. Risk-sharing and informal transfers in networks

Insurance or redistribution ? Motives behind transfers. Perfect insurance and its empirical rejection. Informal insurance in networks. Altruism in networks.

6. Jobs and networks

Information transmission on jobs ; recommendation ; favoritism.

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Normative economics and social ethics

CONTENT

The objective, in this course, is to put the light on the ethical problems one faces when devising poverty and social inequality policies. Such issues are addressed from the point of view of the recent philosophical and economic literature on social justice. The course is based on the book Fondements de la Justice (Kandil, 2012, parts 1 and 2).

Course overview :

Part 1 : The problem with social justice : from ethical pluralism to normative relativism

Part 2 : Normative perspectives on social justice

Part 1 :

Chapt 1) The social justice glossary : rules, principles, values

Chapt 2) Macintyre's analysis : the problem with pluralism and relativism

Chapt 3) Is it possible to avoid the problem ? On Sen’s pragmatism

Part 2 :

Chapt 1) About the social justice principles at the basis of a democratic society : 2 different

Perspectives

Chapt 2) The functional perspective :

2.1) Utilitarianism (classical vs. contemporary versions) and welfare economics

2.2) Wazer’s Spheres of Justice

2.3) Contemporary conventionalism : Hume’s heirs

Chapt 3) The normative perspective

3.1) Agregative procedures : on Arrow’s impossibility theorem

3.2) Deliberative procedures : Habermas and the moral theory of discourse ethics

3.3) Contractarian procedures : the state of nature hypothesis in debate

3.4) The veil of ignorance procedures : Rawls vs. Harsanyi

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VOLUME OF TEACHINGS

  • Lectures: 24 hours

Open courses (student chooses one course) (3 ECTS)

Open courses

Rationality and decision

CONTENT

We aim to give the students the foundations and recent developments of decision theory. We complement these discussions with recent developments in behavioral experiments.

Course overview :

Part 1 Decision theory

Sec 1 Risk and uncertainty : etymology and methodology

Sec 2 First models

Sec 3 Models with ambiguity

Sec 4 Recent models

Part 2 Behavioural experiments

Sec 1 Prospect theory : Its background and perspectives

Sec 2 Overcoming behavioural biases

Sec 3 Discussion on experimental design

Sec 4 Eliciting preferences

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VOLUME OF TEACHINGS

  • Lectures: 24 hours

1 course in the Track Environment-Health or in the track Growth and Development

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Development project

CONTENT

This course aims at training students to conceive development projects. It is based on the study case of a real PCM process

Course overview :

  • Session 1 : Presentation of the study case : applicant NGO, field partners, guidelines, grant application form…
  • Session 2 : participation to the identification process of a real development project : from the focus group to the problem tree co construction
  • Session 3 : participation to the formulation process of a real development project : from the objective tree to the logical framework
  • Session 4 : participation to the budgeting process of a real development project : from the intervention logic to the concept note and figures
  • Session 5 : evaluation of the project

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Semester 4 (30 ECTS)

Vocational training (6 ECTS)

Micro simulation of fiscal policies

CONTENT

Income inequality has been a topic of long-standing interest to economist. Its importance to society is hard to overstate. Recent increases in income inequality in many developed countries have heightened this interest. The purpose of this course is to develop a theoretical understanding of the distribution of income, consumption and wealth ; to build on this to develop methods of measuring inequality, poverty and mobility ; to translate these tools into empirical analysis of various countries and to analyze potential determinants of changes in income distribution and mobility.

Course overview :

Chapter 1. Introduction

  • Illustrative examples
  • Goal of the course
  • Outline of the course

Chapter 2. Inequality

  • What is inequality ?
  • Measurement
  • Inequality comparisons
  • Applications

Chapter 3. Poverty

  • ·What is poverty ?
  • Defining poverty
  • Measuring poverty
  • Applications

Chapter 4. Mobility

  • The « Great Gatsby Curve »
  • Measurement
  • Applications

PDF brochure.

Public policies evaluation

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Housing economics and policies

CONTENT

The objective of the course is to give students an insight into the highly specific functioning of the housing markets. Housing is a very heterogeneous good, subject to rigid supply, large government intervention ; it is part of portofolio management strategy as well as an investment for one’s own consumption. It is closely interrelated with other markets : financial markets, labour markets, goods and services markets… Applying economic concepts to its modelling is hence a challenge and should provide a stimulating ground for thought to students, as well as an insight into a major part of today’s economies. Introduction on : specificities of the housing market and recent developments on the housing markets at the national and international level. The course covers the microeconomic and macroeconomic aspects of housing market modelling. The main empirical approaches to the modelling of the housing market (structural models of housing supply and demand ; portofolio choices ; hedonic approach to the housing market) will be presented. Finally, the course will present the relationships between the housing and other markets (wealth effects, housing and finance, housing and labour markets).

Course overview :

1. Introduction

2. Housing market as an hedonic market

3. The stock-flow macroeconomic model

4. Are Housing Prices efficient ?

5. Housing, Tenure and Portfolio choices

6. The monocentric city model

7. Housing market and other markets

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Master dissertation and internship (24 ECTS)

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