2017

From June 26th to June 30th

HEALTH

Economic analysis
of health policy:
Equity and efficiency issues

PSE SUMMER SCHOOL

www.parisschoolofeconomics.eu
 PSE SUMMER SCHOOL 2017 HEALTH

HEALTH
Economic analysis of health policy:
Equity and efficiency issues
th th
From June 26 to June 30 2017

OVERVIEW
This program is designed to provide an overview of concepts and techniques essential for the analysis of health policies, at
the frontier of health economics research. Instructors will develop the following topics, centered on health policies:
economic preferences and behavior, demand and supply of health care, health care funding, health inequalities and
subjective well-being.

The first three sessions will outline the conceptual and technical framework for analysis of health policy. Specifically the
first session will address the question what can economics bring to the design of health policy? and will explain the goals
of health policy in terms of efficiency and equity. The second session will focus on the quantitative techniques to elicit
preferences, which are essential to identify priorities for resource allocation and to measure the benefits of a policy. These
techniques have broad application in health policy, planning and resource allocation decisions: public preferences for
access to healthcare services and diagnosis choice for instance. The third session will define behavioral economics, which
applies insights from cognitive sciences and psychology to conventional economics, and will deal with behavioral health
policies. Preference-based policies will be discussed, building on material presented in the second session.
The next four sessions will focus on health and healthcare demand and supply. On the demand side, we will look at the
effect of tax policy on consumer demand for health-related goods (food, tobacco) using advanced econometric
techniques employed in structural demand estimation. On the supply side, we will explore the impact of government
regulation in the healthcare sector -- ranging from the definition of optimal payment schemes for health care
professionals to competition regulation -- as well as the effect of the incentives of the different players in the sector on
the market structure of the health care industry. Some of the models used in the sessions on supply will build on the
models presented in the session on demand. Healthcare funding will also be examined.
Finally, in the last two sessions, the relationships between income on the one hand and health and psychological well-
being on the other hand will be considered. The positive association between income and health illustrates social health
inequalities. In particular, we will discuss the formulation of policies aiming at improving health and well-being.
Workshop - Participants will have the opportunity to submit work to be presented and discussed by fellow participants
and faculty on Friday 30 in the afternoon.

PROFESSORS
Bndicte Apouey is a Research Professor in Health Economics at the PSE. She received her PhD from the Ecole des
Hautes Etudes en Sciences Sociales (EHESS) in Paris in 2009 and was then awarded the Young Economist award from
the European Economic Association. Her research focuses on social health inequalities, including the origins of
disparities in childhood and the social determinants of healthy ageing. Current specific research interests include the
longitudinal effect of parental socioeconomic status on child health using cohort data, as well as the impact of wealth
on health among the elderly. http://www.parisschoolofeconomics.eu/en/apouey-benedicte/

Andrew Clark is a Full Research Professor at the PSE and he holds research positions at IZA and LSE. He received his PhD
at the LSE in 1989 and previously held posts in Dartmouth, Essex, the University of Orlans and the OECD. His work is at
the interface of Economics, Psychology and Sociology. His research interests are applied microeconomics and modeling
the utility function (comparisons and habituation, social interactions and social learning). Among others, he has

PSE SUMMER SCHOOL 2017 www.parisschoolofeconomics.eu

 PSE SUMMER SCHOOL 2017 HEALTH
published in Review of Economics and Statistics, Economic Journal, Journal of Economic Literature, Journal of Labor
Economics, Journal of Public Economics and Journal of Health Economics.
http://www.parisschoolofeconomics.eu/en/clark-andrew/

Fabrice Etil is a Full Research Professor at the PSE and the French National Institute for Agronomic Research (INRA).
He is mainly interested in risky health behavior (obesity and food-related diseases, addictive goods), with a specific
focus on the analysis of consumer behavior and the econometric evaluation of public policies. He has published in
leading academic journals such as Economic Journal, Journal of Health Economics, Economics and Human Biology and
Health Economics. http://www.parisschoolofeconomics.eu/en/etile-fabrice/

Matteo M Galizzi is an Assistant Professor of Behavioural Science and ESRC Future Research Leader at the London
School of Economics. He currently has a visiting position at the Hospinnomics Chair at PSE. Graduated from University
of Pavia (Italy), he holds an MSc in Econometrics and a PhD in Economics from the University of York (UK). Matteo is an
experimental and behavioral economist conducting behavioral experiments in health between the lab and the field. He
also has taken research, teaching, and visiting positions at the Universities of Pavia, York, Varese, Autonoma of
Barcelona, Brescia, Queen Mary London, and Durham. http://bit.ly/2iHHqv2

Pierre-Yves Geoffard is the Director of the PSE and is also a Full Research Professor at CNRS and at the Ecole des
Hautes Etudes en Sciences Sociales (EHESS). His main research areas are in the economic analysis of health policy and
in risk and insurance economics. His research has been published in leading academic journals such as Econometrica,
American Economic Review, Biometrika, Journal of Economic Theory, International Economic Review, RAND Journal of
Economics, and Journal of Health Economics. He received a best paper award in 2009 for an article published in Health
Economics. He has also been an Associate Editor of Health Economics and a member of the National AIDS Council
(France) over recent years. http://www.parisschoolofeconomics.eu/en/geoffard-pierre-yves/

Daniel Herrera-Araujo was awarded his PhD by the Toulouse School of Economics in 2015 and then joined the health
economics research chair (Hospinnomics) at the PSE as researcher. His interests lie in health, industrial organization,
and environment. He is currently working on the impact of hospital mergers and acquisitions in France and on the
valuation of small mortality risk reductions using novel methods.
http://www.parisschoolofeconomics.eu/en/herrera-daniel/

Nicolas Jacquemet is an Associate Professor at the PSE and a Professor at Panthon-Sorbonne University, where he is
the director of the Economics and Psychology master program. He is particularly interested in theory driven empirical
research related to preference elicitation methods and physician compensation behavior. His research extends to labor
and environmental economics and game theory. To do this work, he combines experimental methods and
econometrics applied to real-world data. http://www.parisschoolofeconomics.eu/en/jacquemet-nicolas/

Lise Rochaix is the Scientific Director of the Hospinnomics Chair at the PSE (endowed by the Hospitals of Paris) as well
as a Full Professor at Paris 1 Panthon-Sorbonne University. Her research interests focus on the evaluation of public
policies, in an international comparative perspective. She has extensively published on regulatory issues in the
healthcare industry, balancing equity and efficiency considerations.
http://www.parisschoolofeconomics.eu/en/rochaix-lise/

Programme Supervisor: Bndicte Apouey

PREREQUISITES
Graduates in Economics with strong theoretical and empirical skills.

PSE SUMMER SCHOOL 2017 www.parisschoolofeconomics.eu

 PSE SUMMER SCHOOL 2017 HEALTH

SCHEDULE
Monday June, 26th
8.30 am - 9 am Welcome coffee
9 am - 10.30 am Pierre-Yves Geoffard, What can economics bring to the design of health policy?
10.30 am - 11 am Coffee break
11 am - 12.30 pm Pierre-Yves Geoffard, What can economics bring to the design of health policy?
12.30 pm - 2 pm Lunch
2 pm - 3.30 pm Nicolas Jacquemet, Preference elicitation for health care interventions:
Lessons from behavioral economics
3.30 pm - 4 pm Coffee break
4 pm - 5.30 pm Nicolas Jacquemet, Preference elicitation for health care interventions:
Lessons from behavioral economics

Tuesday June, 27th

9 am - 10.30 am Matteo M. Galizzi, Behavioral economics and health policies
10.30 am - 11 am Coffee break
11 am - 12.30 pm Matteo M. Galizzi, Behavioral economics and health policies
12.30 pm - 2 pm Lunch
2 pm - 3.30 pm Fabrice Etil, Demand modelling in the economic evaluation of price policies
3.30 pm - 4 pm Coffee break
4 pm - 5.30 pm Fabrice Etil, Demand modelling in the economic evaluation of price policies

Wednesday June, 28th

9 am - 10.30 am Daniel Herrera-Araujo and Lise Rochaix, Health care markets: Theory and empirics (Part I)
10.30 am - 11 am Coffee break
11 am - 12.30 pm Daniel Herrera-Araujo and Lise Rochaix, Health care markets: Theory and empirics (Part I)
12.30 pm - 2 pm Lunch
2 pm - 3.30 pm Daniel Herrera-Araujo and Lise Rochaix, Health care markets: Theory and empirics (Part II)
3.30 pm - 4 pm Coffee break
4 pm - 5.30 pm Daniel Herrera-Araujo and Lise Rochaix, Health care markets: Theory and empirics (Part II)

Thursday June, 29th

9 am - 10.30 am Pierre-Yves Geoffard, Funding health care
10.30 am - 11 am Coffee break
11 am - 12.30 pm Pierre-Yves Geoffard, Funding health care
12.30 pm - 2 pm Lunch
2 pm - 3.30 pm Bndicte Apouey, Social health inequalities
3.30 pm - 4 pm Coffee break
4 pm - 5.30 pm Bndicte Apouey, Social health inequalities

Friday June, 30th

9 am - 10.30 am Andrew Clark, Happiness, the Easterlin paradox and public policy
10.30 am - 11 am Coffee break
11 am - 12.30 pm Andrew Clark, Happiness, the Easterlin paradox and public policy
12.30 pm - 2 pm Lunch
2 pm - 3.30 pm Bndicte Apouey, Andrew Clark, Fabrice Etil, Pierre-Yves Geoffard, Daniel Herrera-Araujo
and Lise Rochaix, Workshop
3.30 pm - 4 pm Coffee break
4 pm - 5.30 pm Bndicte Apouey, Andrew Clark, Fabrice Etil, Pierre-Yves Geoffard, Daniel Herrera-Araujo
and Lise Rochaix, Workshop

PSE SUMMER SCHOOL 2017 www.parisschoolofeconomics.eu

 A SUMMER
ON THE JOURDAN CAMPUS
The 2017 Summer School will take place in the new PSE building, situated on the Jourdan campus in the 14th
arrondissement of Paris, which has just been officially inaugurated by President Franois Hollande. Designed by the
architectural company TVAA and jointly funded by the Rgion le-de-France, the central state and the city of Paris, the
12 500 m building houses researchers, students, and administrative teams of the Paris School of Economics and the
Ecole normale suprieure.

PSE SUMMER SCHOOL 2017 www.parisschoolofeconomics.eu

HEALTH PSE SUMMER SCHOOL 2017 HEALTH

What can Economics bring

to the design of health policy?
Pierre-Yves Geoffard

This course takes place on Monday

OBJECTIVES
The design of public health policy requires a good understanding of how individuals and organizations adapt their
behavior to such policies, and relies on a clear definition of the objectives, both in terms of equity and efficiency. This
first course presents an overview of the economics toolbox, with a discussion on its strengths and limitations.

COURSE STRUCTURE
1. Some basic empirical facts (mainly in OECD countries): life expectancy, mortality rate by age, health
expenditures
2. Some questions
a. Immediate questions: What are the determinants of the increase of life expectancy? What are the
determinants of health care expenditures and their impact?
b. What is health, health care, and a health system?
c. Health Economics and the design of health policy: Objectives (equity, efficiency) and tradeoffs
3. Some elements of theory
a. Inequalities: relationship between economic conditions and health at the macro and micro levels;
overall and social inequalities; the three interpretations of the gradient; policy implications of the
gradient
b. The health capital model, models of health behavior

REFERENCES
- OECD (2015). Health at a Glance 2015: OECD Indicators
- The Oxford Handbook of Health Economics (2011) Sherry Glied and Peter Smith, eds, Oxford University Press
- The Elgar Companion to Health Economics, second edition (2013) Andrew Jones ed., Edward Elgar

PSE SUMMER SCHOOL 2017 www.parisschoolofeconomics.eu

HEALTH PSE SUMMER SCHOOL 2017 HEALTH

Preference elicitation for health care interventions:

Lessons from behavioral economics
Nicolas Jacquemet

This course takes place on Monday

OBJECTIVES
To make the best use of resources and achieve an efficient and equitable allocation of funds, decision-makers make use
of cost-benefit analysis to decide whether a policy should be implemented or not. A measure of benefit is the change in
individual welfare induced by the policy. Typically, markets provide an evaluation of individual preferences for a good
through the price at which a transaction occurs. But health care goods are generally non-market goods, and societies
are faced with the question of how to measure individual preferences, in the absence of markets. Economists usually
get an answer to the question by simply asking individuals how much they would be willing to pay to get access to the
non-market good. The course will present the properties of such surveys (the main application will be discrete choice
experiments -- DCE) in the light of behavioral economics. Students will be involved in an experiment focusing on
preference elicitation mechanisms, and will participate in an interactive debriefing session to identify what we learn
from the experiment.

COURSE STRUCTURE
1. Introduction: The need for elicitation methods of preferences for non-market goods
2. Preference elicitation in the lab: Evidence of hypothetical bias
a. An induced value auction in the lab
b. Preference elicitation vs. preference formation: Evidence from homegrown value experiments
3. DCE and their empirical properties
a. The use of DCE for the evaluation of healthcare goods
b. The internal validity of DCE: Evidence from induced value experiments
4. How to design truthful preference elicitation surveys?
a. Ex-post methods
b. Ex-ante methods: Cheap talk and commitmentxxx

REFERENCES
- ***de Bekker-Grob EW, Ryan M, Gerard K, (2012). Discrete choice experiments in health economics: A review of
the literature. Health Economics, 21(2):145-172.
- Jacquemet N, Joule R-V, Luchini S, Shogren J F, (2013). Preference elicitation under oath. Journal of
Environmental Economics and Management, 65(1):110132.
- Jacquemet N, Luchini S, Shogren J F, Watson V, (2016). Using commitment to improve choice experiment survey
responses. Working paper.
- Lancsar E, Louviere J, (2008). Conducting discrete choice experiments to inform healthcare decision making: A
users guide. Pharmacoeconomics, 26(8):661-677.
- Ryan M, (2004). Discrete choice experiments in health care. British Medical Journal, 328:360.

PSE SUMMER SCHOOL 2017 www.parisschoolofeconomics.eu

HEALTH PSE SUMMER SCHOOL 2017 HEALTH

Behavioral economics
and health policies
Matteo M. Galizzi

This course takes place on Tuesday

OBJECTIVES
The objectives are to describe the main challenges brought about by risky health behaviors to the sustainability of
health systems in developed countries and to critically analyze, from the lens of behavioral economics, the nature, the
main characteristics, and the effectiveness of the different health policies tackling risky health behaviors, including:
preference-based policies, information-based policies, financial incentives, including behaviorally super-charged
incentives, regulation, including fat taxes and thin subsidies and nudges.

COURSE STRUCTURE
1. Risky health behaviors and their impact on the sustainability of health systems in OECD countries
2. Behavioral economics: An operational definition
3. A taxonomy of health policies from the lens of behavioral economics
4. Preferences-based policies
a. The external validity of risk and time preferences in health
5. Information-based policies
a. Salient cues and behaviorally super-charged information
6. Financial incentives
a. Incentives beyond the short run: sustainability of behavioral change in health
b. Behavioral spillovers, and unintended consequences of financial incentives in health
c. Behaviorally super-charged incentives
7. Regulation
a. Externalities and market failures
b. Fat taxes and thin subsidies
8. Nudges
a. Behavioral economics, externalities, and internalities

REFERENCES
- Dolan P, Galizzi MM, (2015). Like ripples on a pond: behavioural spillovers and their consequences for
research and policy. Journal of Economic Psychology, 47:1-16.
- ***Galizzi MM, (2014). What is really behavioural in behavioural health policies? And, does it work?
Applied Economics Perspectives and Policy, 36(1):25-60.
- Loewenstein G, Brennan T, Volpp KG, (2007). Asymmetric paternalism to improve health behaviors. Journal
of the American Medical Association, 298(20):2415-2417.
- Loewenstein G, Asch DA, Friedman JY, Melichar LA, Volpp KG, (2012). Can behavioural economics makes us
healthier? British Medical Journal, 344:e3482.
- Volpp K, John LK, Troxel AB, Norton L, Fassbender J, Loewenstein G, (2008). Financial incentive-based
approaches for weight loss. Journal of the American Medical Association, 300(22):2631-2637.

PSE SUMMER SCHOOL 2017 www.parisschoolofeconomics.eu

HEALTH PSE SUMMER SCHOOL 2017 HEALTH

Demand modelling in the economic

evaluation of price policies
Fabrice Etil

This course takes place on Tuesday

OBJECTIVES
The main objective of this session is to develop abilities to evaluate the impact of price policies on consumer demand,
with a specific focus on nutritional taxes. Food taxation is now recognized by international organizations and
institutional bodies as a promising tool for curbing the obesity epidemic and enhancing nutritional health. Successful
implementation of tax policies requires ex ante evidence about their behavioural, economic and health impacts. At the
end of the session, students should be able to: (i) list and discuss the main normative and positive issues raised by food
tax policies, (ii) understand uses, advantages and limits of various data sets and modelling strategies, (iii) estimate
structural demand systems and interpret their results for policy evaluation and to make recommendations. Although
the course will use food taxation as a running example, it will provide students with sufficient knowledge to model
demand for any risky good (e.g. tobacco) or for health care.

COURSE STRUCTURE
1. Main issues in the economic analysis of nutritional taxes: Normative rationales for their use; choice of a tax
design; effectiveness vs. equity concerns; articulations of economic and legal challenges
2. Data and models: scanner data vs. household budget data; empirical issues in price measurement; analysing
choices over quantities vs. choices over quality
3. Modelling demand for quantity: QUAIDS model; aggregation; zeros
4. Modelling demand for quality: Mixed multinomial logit models; identification of the price effects; estimation
techniques
5. Brief discussion around various issues: Unobserved heterogeneity; consumption dynamics; count data;
modelling distributions Climate change in macroecoeconomic modelling

REFERENCES
- Allais O, Etil F, Lecocq S, (2015). Mandatory labels, taxes and market forces: An empirical evaluation of fat
policies. Journal of Health Economics, 43:27-44.
- Banks J, Blundell R, Lewbel A, (1997). Quadratic Engel curves and consumer demand. Review of Economics and
Statistics, 79(4):527-539.
- Etil F, (2011). Food consumption and health, in: Oxford Handbook of the Economics of Food consumption and
Policy (Lusk J., Shogren J. and Roosen J. eds), Oxford: Oxford University Press, Chapter 29, 317-346.
- ***Nevo A, (2010). Empirical models of consumer behavior. NBER Working Paper No. 16511

PSE SUMMER SCHOOL 2017 www.parisschoolofeconomics.eu

HEALTH PSE SUMMER SCHOOL 2017 HEALTH

Health care markets:

Theory and empirics (Parts I and II)
Daniel Herrera-Araujo and Lise Rochaix

This course takes place on Wednesday

OBJECTIVES
Health care is a complex system, with strong market failures, in particular informational asymmetry and uncertainty.
Key players in the industry range from international groups such as drug companies, profit and not-for-profit hospitals,
social and private insurance, to health care professionals. The interactions between these players generally determine
the health outcome of consumers in this industry, i.e. patients. Government intervention is multidimensional, ranging
from administrative to economic regulation, such as the design of optimal payment schemes. These two sessions are
aimed at providing participants with a broad understanding of how health care markets work and the impact of
government regulation. Theoretical and empirical research surrounding the formation of the health care market
structure, competition and quality will be surveyed.

COURSE STRUCTURE
1. Part I
a. Is competition good for health care?
i. Can information asymmetries be overcome? The value of information
ii. Who competes with whom? Can competition be used to enhance quality?
b. Regulating market structure
i. Vertical integration and horizontal concentration: the role of governments
2. Part II
a. Paying for doctors, paying for hospitals
i. Performance payments: the quality issue
ii. The role of intrinsic versus extrinsic motivations
iii. The importance of multidisciplinary team work
b. Regulating access to innovation
i. Measuring outcomes (individual and collective preferences)
ii. Making choices to set priorities: Efficiency / equity tradeoffs

REFERENCES
Part I: Topics (1) & (2)
- Cutler D, Scott-Morton F, (2013). Hospitals, market share, and competition, JAMA, 310(18):1964-1970.
- ***Gaynor M, Moreno-Serra R, Propper C, (2013). Death by market power: Reform, competition, and
patient outcomes in the National Health Service. American Economic Journal: Economic Policy 5(4):134-166.
- Gowrisankaran G, Nevo A, Town R, (2013). Mergers when prices are negotiated: Evidence from the hospital
industry. NBER Working Paper No. 18875.
- Huckman R S, (2006). Hospital integration and vertical consolidation: An analysis of acquisitions in New York
State, Journal of Health Economics, 25(1):58-80.
- Kessler D, McClellan M, (2000). Is hospital competition socially wasteful? Quarterly Journal of Economics,
115(2):577-615.
Part II: Topic (3) & (4)
- Bloom N, Propper C, Seiler S, Van Reenen J, (2015). The impact of competition on management quality:
Evidence from public hospitals. Review of Economic Studies, 82:457-489.
- ***Clemens J, Gottlieb J D, (2014). Do physicians financial incentives affect treatment patterns and patient
health? American Economic Review, 104(4):1320-1349.
- Duggan M, Scott-Morton F, (2010). The effect of Medicare Part D on pharmaceutical prices and utilization.
American Economic Review,100(1):590-607.

PSE SUMMER SCHOOL 2017 www.parisschoolofeconomics.eu

 PSE SUMMER SCHOOL 2017 HEALTH
- Finkelstein A, Taubman S, Wright B, Bernstein M, Gruber J, Newhouse JP, Allen H, Baicker K, The Oregon
Health Study Group (2011). The Oregon Health Insurance experiment: Evidence from the first year. NBER
Working Paper No. 17190.
- Nassiri A, Rochaix L, (2006). Revisiting physicians financial incentives in Qubec: A panel system approach.
Health Economics, 15(1):49-64

PSE SUMMER SCHOOL 2017 www.parisschoolofeconomics.eu

HEALTH PSE SUMMER SCHOOL 2017 HEALTH

Funding health care

Pierre-Yves Geoffard

This course takes place on Thursday

OBJECTIVES
Funding health care takes various forms across different countries, and sometimes even within a given country. This
session will focus mostly on insurance-based funding and will discuss the regulation of such insurance-based
mechanisms. By reducing the monetary cost of health care paid by patients, healthcare insurance improves access to
care, but may also encourage excessive consumption of care. This ex-post moral hazard phenomenon is present for
public or private insurance, and must be assessed empirically. When health insurance is organized as a competitive
market, several additional issues are at stake: premium regulation, risk selection by insurance firms, risk adjustment
mechanisms, self-selection and contract competition.

COURSE STRUCTURE
1. Facts and theories
a. Moral hazard (price elasticity of demand)
b. Self-selection and adverse selection (if competition in contracts)
c. Segmentation and selection
2. Regulation
a. Co-payments
b. Mandatory insurance
c. Premium regulation
d. Risk adjustment mechanisms

REFERENCES
- Aron-Dine A, Einav L, Finkelstein A, (2013). The RAND health insurance experiment, three decades later.
Journal of Economic Perspectives, 27(1):197-222.
- Geoffard P-Y, (2012). Incentives and selection effects in health insurance. Chapter 10 in Elgar Companion to
Health Economics, Jones AM (ed.). Edward Elgar, Cheltenham.
- Blomqvist A, (2011). Public-sector health care financing. Chapter 12 in The Oxford Handbook of Health
Economics, Glied S and Smith P (eds.). Oxford University Press.
- ***Breyer F, Bundorf MK, Pauly MV, (2012). Health care spending risk, health insurance, and payment to
health plans. Chapter 11 in Handbook of Health Economics, Pauly M, McGuire T, and Pita-Barros P (eds).
North Holland.

PSE SUMMER SCHOOL 2017 www.parisschoolofeconomics.eu

HEALTH PSE SUMMER SCHOOL 2017 HEALTH

Social health inequalities

Bndicte Apouey

This course takes place on Thursday

OBJECTIVES
Individuals born in richer countries can expect to live longer than those born in poorer nations. Moreover, within
nations, higher socioeconomic status (SES) is associated with better health, even in countries with free health care (this
is the so-called gradient). Although this association seems to be widespread, there is less common ground regarding its
interpretation. Specifically, this association may be interpreted in three different ways: a causal effect of SES on health,
an effect of health on SES, and the omission of third common hidden factors (such as time preference). The aim of the
course is to present and discuss the strengths and weaknesses of recent research on health inequalities, focusing on
two strands of the literature. A first strand is merely descriptive and develops inequality indices that satisfy some
interesting properties, to describe the evolution of disparities over time in a specific country, or to compare the level of
inequalities between countries. A second strand of the literature tries to quantify the causal effect of SES on health
using econometric techniques. Specifically, these efforts focus on two strategies: use exogenous shocks in SES to
quantify the effect of SES for adults, and study children for whom the likely path goes from family SES to child health.
Possible reasons for the gradient will be discussed, as well as their implications for policy aiming at improving the
health of the poor.

COURSE STRUCTURE
1. Introduction: Inequalities between The relationship between income and life expectancy using cross-country
data (the Preston curve); the correlation between socioeconomic status and health within countries;
measuring socioeconomic status and health; the three interpretations of the relationship between
socioeconomic status and health
2. Measuring health inequalities using indices
a. Overall health inequalities: The univariate approach
b. Social health inequalities: The bivariate approach; the concentration index
c. Limitations and extensions of the concentration index: why measuring health is problematic; ordinal
approaches; polarization indices
3. Quantifying the effect of socioeconomic status on health
a. The causal effect of income on health for adults: Instrumental variables; policy implications
b. Family income and child health: Evolution of disparities with age; mechanisms; policy implications

REFERENCES
- Apouey B, Clark AE, (2015). Winning big but feeling no better? The effect of lottery prizes on physical and
mental health. Health Economics, 24(5):516-538.
- Apouey B, Geoffard P-Y, (2013). Family income and child health in the UK. Journal of Health Economics,
32(4):715-727.
- ***Case A, Lubotsky D, Paxson C, (2002). Economic status and health in childhood: The origins of the
gradient. American Economic Review, 92(5):1308-1334

PSE SUMMER SCHOOL 2017 www.parisschoolofeconomics.eu

HEALTH PSE SUMMER SCHOOL 2017 HEALTH

Happiness, the Easterlin paradox

and public policy
Andrew Clark

This course takes place on Friday

OBJECTIVES
Many people believe that it is obvious that more money will make us happier. However, much research not only in the
dismal science of Economics, but across the social sciences, suggests otherwise. Moneys role in producing happiness is
compromised by social comparisons (I compare my income to yours, and you compare your income to mine) and
adaptation (I compare my income to what I used to have in the past). But if money doesnt work in making us happy,
does that necessarily mean that we would be better off doing something else instead? Some of the research discussed
here suggests that the phenomena of comparison and adaptation are fairly pervasive (regarding work, marriage,
children, friendships, body shape and so on). This makes happiness policy more difficult to formulate.

COURSE STRUCTURE
1. What is the Easterlin Paradox? The relationship between income and happiness at a point in time, between
countries and between individuals; and the relationship between income and happiness within a country over
time
2. Explaining the Easterlin Paradox via social comparisons of income and adaptation to income
3. Evidence of social comparisons and adaptation from the analysis of subjective well-being data
4. Evidence of social comparisons and adaptation from laboratory experiments, hypothetical preferences,
natural experiments and neuroeconomics
5. Policies for happiness: But what if the other domains of economic and social life that are correlated with
happiness (such as the labor market status, marriage, children, health, and religion) exhibit social comparisons
and adaptation too?

REFERENCES
- Clark A E, (2016). Adaptation and the Easterlin paradox. In T. Tachibanaki (Ed.), Advances in happiness
research: A comparative perspective. New York: Springer.
- Clark A E, (2016). Happiness, habits and high rank: Comparisons in economic and social life. In S. Bartolini, E.
Bilancini, L. Bruni, and P.-L. Porta (Eds.), Policies for Happiness. Oxford: Oxford University Press.
- Clark A E, DAmbrosio C, Ghislandi S, (2016). Adaptation to poverty in long-run panel data. Review of
Economics and Statistics, 98:591-600.
- ***Clark A E, Frijters P, Shields M, (2008). Relative income, happiness and utility: An explanation for the
Easterlin paradox and other puzzles. Journal of Economic Literature, 46:95-144.
- Easterlin R, (2016). Paradox lost? IZA, Discussion Paper No. 9676

PSE SUMMER SCHOOL 2017 www.parisschoolofeconomics.eu

 HOW TO APPLY TO THE PSE SUMMER SCHOOL 2017
Presentation
Our ten one-week programmes are entirely run in English. Each includes a total of around 30 hours instruction and
consists of different thematic courses that are complementary. At the end of the programme, you will receive a
certificate. You are expected to participate in all of the courses of their one-week programme; you can follow only one
programme per week, but can apply to three consecutive ones.
Each programme is equivalent to 3 ECTS. Students interested in this transfer should contact their universities.
Here are the links to the different programmes (lectures, Professors, schedule, prerequisites etc.):

CLIMATE MACROECO. MICROECO. MIGRATION DEVELOPMENT EXPERIMENT. HEALTH TRADE BOUNDED INDUSTRIAL
CHANGE ECONOMICS ECONOMICS RATIONALITY ORGANIZATION

Participant profiles and selection

The PSE Summer School is aimed at professionals, researchers, as well as graduate students in Economics and Finance
(Masters and PhD). Undergraduate students in Economics will be considered only if their profile is exceptionally strong.
To be included in your application file:
A current Curriculum Vitae in pdf format A profile picture [not used per se in the application process]
A copy of your most advanced degree For Students: proof of status
A short motivation text Optional - Letter(s) of recommendation
On www.pse-application.eu candidates can apply continuously till the final deadline, which is Monday May the 15th.
You can start the process whenever you want, create and save your profile step by step, until the final submission. Each
application will be reviewed by the programme supervisor(s) within 15 days afterwards. Once accepted, you will have
then 15 days to pay the total fees and therefore validate your participation. You will then receive detailed information
about the courses, workshops, and social events, as well as suggestions for accommodation.
We advise you not to wait until the last moment. Applications will be reviewed continuously: if the maximum number
of participants is exceeded, applicants will be put on the wait list.

Fees
Fees include lunches and
coffee breaks every day,
as well as the welcome
and the farewell
cocktails. The fees do not
include accommodation,
transport or any other
services.
Cancellation policy - Confirmed participants who wish to cancel must do so in writing by email. When withdrawing from
the programme, participants will have their tuition fees partially refunded as follows:
- Cancellation before May 1st, 2017: 80% refund
- Cancellation before June 1st, 2017: 50% refund
- Cancellation after June 1st, 2017: no refund possible
Any questions? summer-school@psemail.eu

PSE SUMMER SCHOOL 2017 www.parisschoolofeconomics.eu

PSE SUMMER SCHOOL

2017, PARIS
www.parisschoolofeconomics.eu