2022 Faculty Courses School of Environment and Society Undergraduate major in Civil and Environmental Engineering
Public Economics
- Academic unit or major
- Undergraduate major in Civil and Environmental Engineering
- Instructor(s)
- Daisuke Fukuda / Katsumi Tanabe / Tatsurou Sakano
- Class Format
- Lecture (Face-to-face)
- Media-enhanced courses
- -
- Day of week/Period
(Classrooms) - 1-2 Tue (W932) / 1-2 Fri (W932)
- Class
- -
- Course Code
- CVE.D311
- Number of credits
- 200
- Course offered
- 2022
- Offered quarter
- 3Q
- Syllabus updated
- Jul 10, 2025
- Language
- Japanese
Syllabus
Course overview and goals
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.
Course description and aims
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).
Keywords
Economics, Microeconomics, Transportation and Urban Economics, Public Economics, Market Failure, Externality, Economic Policy, Mechanism design
Competencies
- Specialist skills
- Intercultural skills
- Communication skills
- Critical thinking skills
- Practical and/or problem-solving skills
Class flow
While theoretical foundations of economics are explained, mid-term exam will be set. The final exam will also be set.
Course schedule/Objectives
| Course schedule | Objectives | |
|---|---|---|
| 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 | Characteristics of transportation infrastructure and its evaluation | - Social capital and its characteristics - Evaluation method of transportation infrastructure investment - Infrastructure development by public sector - Resource allocation problem |
| Class 9 | Financing and managing transportation infrastructure | - Financing transportation infrastructure - Cross subsidy for transportation infrastructure - Transportation infrastructure as local public goods |
| Class 10 | Hidden actions and moral hazard problem | - Examples of hidden actions - Purpose, classification, and implementation of regulation |
| Class 11 | Hidden information and adverse selection | - Hidden information / asymmetric information - Example of adverse selection problems |
| Class 12 | Corporate governance and agency theory | - Partnerships - The Owner-Employee relationship |
| Class 13 | Theory of auctions | - Vickrey type auction - Revenue equivalence theorem |
| Class 14 | Public goods and preference revelation | - Pivotal mechanism - Groves mechanisms |
Study advice (preparation and review)
To enhance effective learning, students are encouraged to spend approximately 100 minutes preparing for class and another 100 minutes reviewing class content afterwards (including assignments) for each class.
They should do so by referring to textbooks and other course material.
Textbook(s)
Particularly not. Handouts will be circulated during the class and also be uploaded to OCWi.
Reference books, course materials, etc.
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.
Evaluation methods and criteria
Small report (30%), Mid-term report (35%), Final report (35%)
Related courses
- CVE.D201 ： Fudamentals of Infrastructure Planning
- CVE.D210 ： Planning Theory for Civil and Environmental Engineering
- CVE.D312 ： Behavioral Theory of Public Systems
- CVE.D301 ： Traffic and Transportation Systems
- CVE.D403 ： Transportation Economics
- CVE.D211 ： Introduction to National Land Use and City Planning
- ARC.P305 ： National and City Planning
Prerequisites
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.