Department of Economics, University of California - Davis

Professor Colin Cameron,  1124 Social Sciences and Humanities
Email:  Website:

Meeting: Tues Thurs 1.40 - 3.00 pm  Wellman 106  (In person and no recording)

Office Hours:  Tuesday      3.30 - 5.00 pm   (in person at SSH 1124)
sday 3.30 - 5.00 pm  (zoom plus I will usually be zooming from my office)

Teaching Assistants: 

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Discussion Sections:
A01: Wednesday 11.00 - 11.50 am  Hutchison 93  ??
A02: Wednesday 12.10 - 1.00 pm  Hutchison 93  ??
A03: Wednesday   1.10 - 2.00 pm  Hutchison 93   ??
A04: Wednesday   2.10 - 3.00 pm  Hutchison 93  ??

Course Goals:
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.

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.


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)

G. Government's Role in Health Care
Class 17.  Supplemental Notes.  (Bhattacharya Ch. 20)

H. Medical Technology
Class 18

International Comparisons

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

Class 20.  Review of Course


Key material is posted at the course Canvas site (
This includes complete slides for the course (under Files / Lecture slides) and assignments (under Files / Homeworks)
Additionally, some past exams and solutions are at

Lecture slides: 
Lecture Slides are posted at the course Canvas site ( under Files / Lecture Slides.
Additionally the notes that I write out during each class are posted after class under Files / Handwritten Notes.
Lectures will not be recorded.

Textbook: Not required 
I give references to this book in the syllabus for those who want to read more about health economics.
Jay Bhattacharya, Timothy Hyde and Peter Tu: Health Economics, First edition, Palgrave MacMillan, 2014.

Stata for regression:

Part of the course entails analyzing health-related data using regression methods with the statistical package STATA.
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, 2216 TLC, and the Virtual Lab (evenings and weekends when labs are closed - see
To see whether 93 Hutchison and 2216 TLC are available see
To get started in Stata see

This video provides directions if you use the Virtual lab: Connect_virtual_lab_and_start_Stata.mp4

If you choose to purchase Stata go to
For this course and other economics classes Stata/BE 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  and especially
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


Midterm Exam 1:   20%      1.40 pm Thursday April 25  In-class exam 
Midterm Exam 2:   20%     1.40 pm Thursday May16   In-class exam  
Assignments:         20%    
Due 10.00 a.m.  Fridays April 12, 19; May 3, 10, 24; June 5 (Wednesday).
Final Exam:             40%     Thursday June 13 6.00 - 8.00 p.m.    ComprehensiveIn-class exam

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
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).


Academic Honesty: Academic dishonesty is unfair to the majority of students who are honest. To that end the Davis Division of the U.C. Faculty Senate has the following policies.
(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 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.

Out of class collaboration: You are allowed to work together in groups for the assignments, but each student must turn in an individual solution. Please indicate on the solution the names of the other students you worked with, if any that you worked with you on the problem set. And for Stata, each person must create their own Stata output and write up their own answers. It is not a violation of this policy to submit essentially the same answer on an assignment as another student, but it is a violation of this policy to submit a close to exact or exact copy.

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.