To study fundamentals and applications of economic theories (e.g. microeconomics, transport economics, game theory and mechanism design) utilized for analyzing and evaluating infrastructure development. Also to study the practices of infrastructure-related economic policy.
Studying fundamental ways of economic thinking about infrastructure projects such as: (1) Microeconomic theory on costs and prices; (2) Economic evaluation method of infrastructure projects; (3) Economic analysis of transport policies; (4) Institutional design with economic incentives; (5) Fundamentals of governance theory; and (6) Energy industries and Private Finance Initiative (PFI).
Economics, Microeconomics, Transportation and Urban Economics, Public Economics, Market Failure, Externality, Economic Policy, Mechanism design
|✔ Specialist skills||Intercultural skills||Communication skills||Critical thinking skills||Practical and/or problem-solving skills|
While theoretical foundations of economics are explained, mid-term exam will be set. The final exam will also be set.
|Course schedule||Required learning|
|Class 1||Role of economic analysis for evaluating infrastructure develpment||- Infrastructure project and its economic analysis - History of cost benefit analysis - What is the economics way of thinking?|
|Class 2||Foundations of consumer behavior theory||- Consumption possible frontier (budget constraint) - Preference, utility, indifference curve, marginal rate of substitution - Choice (utility maximization) - Demand function, price/income elasticities - Consumer surplus and benefit calculation - Duality|
|Class 3||Foundations of producer/firm behavior theory||- Variable input, Fixed input, diminishing marginal productivity - Short term, Long term/Average, Marginal costs - Variable/Fixed Costs - Cost Minimization Problem and Cost Function - Production Technology - Profit Maximization and Production Function - Producer Surplus - Variable/Fixed Cost Functions|
|Class 4||Theory of market||- Law of Single Price - Price Taker and Price Maker - Market Equilibrium - Excess Demand/Supply - Partial/General Equilibrium - Consumer/Producer/Social Surplus - The 1st Theorem of Welfare Economics - Monopoly and Law of decreasing Marginal Cost, Oligopoly|
|Class 5||Market failure and its correction||- Monopoly - Externality - Congestion charging - Public goods|
|Class 6||Cost-benefit analysis||- Principle and history of cost benefit analysis - Social discount rate - Definition and measurement of economic benefit|
|Class 7||Exercises for economic evaluation of infrastructure facilities||- Cost-benefit analysis - General equilibrium model - Computable urban economic model|
|Class 8||Hidden actions and moral hazard problem||- Resource allocation problem - Examples of hidden actions - Purpose, classification and implementation of regulation|
|Class 9||Hidden information and adverse selection||- Hidden information / asymmetric information - Example of adverse selection problems|
|Class 10||Corporate governance and agency theory||- Partnerships - The Owner-Employee relationship|
|Class 11||Theory of auctions||- Vickrey type auction - Revenue equivalence theorem|
|Class 12||Public goods and preference revelation||- Pivotal mechanism - Groves mechanisms|
|Class 13||Characteristics of transportation infrastructure and its evaluation||- Social capital and its characteristics - Evaluation method of transportation infrastructure investment - Infrastructure development by public sector|
|Class 14||Financing and managing transportation infrastructure||- Financing transportation infrastructure - Cross subsidy for transportation infrastructure - Transportation infrastructure as local public goods|
Particularly not. Handouts will be circulated during the class and also be uploaded to OCWi.
The followings are all study-aid books.
- Takeuchi (2008) Introduction to transportation economics, Yuhikaku.
- Yamauchi & Takeuchi (2002) Transportation economics, Yuhikaku.
- Hatta (2009) Introduction to Microeconomics 1 & 2, Toyokeizai.
- Fujii (2010) Public works saving Japan, Bunshun.
- Campbell, D.E. "Incentives: Motivation and the Economics of Information (2nd Ed.)" Cambridge University Press, 2006.
Mid-term exam or report (40%), Final exam or report (40%), Small report & Small quiz (20%)
It is recommend to take "CVE.D201 ： Fudamentals of Infrastructure Planning", "CVE.D210 ： Planning Theory for Civil and Environmental Engineering" and "CVE.D301 ： Traffic and Transportation Systems" in advance.