Evaluation of Economic Impact

Code:

2ME24

Acronym:

EEI

Keywords
Classification	Keyword
OFICIAL	Economics

Instance: 2022/2023 - 2S

Active?	Yes
Course/CS Responsible:	Master in Economics

Cycles of Study/Courses

Acronym	No. of Students	Study Plan	Curricular Years	Credits UCN	Credits ECTS	Contact hours	Total Time
ME	27	Official Syllabus after 2021-2022	1	-	6	42	162

Teaching language

Portuguese

Objectives

The main objective is the development of skills in the scope of methods for impact assessment of interventions (projects, public or private policies, institutions activities,…). Focus will be taken on the conceptual framework of impact assessment methodologies and on the following main approaches:

1) Methodologies for impact assessment main macroeconomic aggregates (GDP, employment, household income, investment, tax revenue,…), based on multiplier effects theory.

2) Methodologies for the evaluation of experimental interventions requiring the collection of information (surveys, ...), based on cost-benefit analysis tools.

3) Explanatory methodologies focused on growth-factors decomposition, including growth accounting approaches and econometric techniques.

Adopting a theoretical-practical base approach, theoretical material concerning impact assessment procedures will be discussed by exemplifications of relevant case studies, allowing to illustrate the use of most relevant instruments of analysis.

Learning outcomes and competences

As a main result, it is expected that students acquire knowledge in the field of impact assessment methods and techniques currently available, develop capacities for reading and interpreting results of economic impact studies, and improve skills for an appropriate use of this type of quantitative analysis tools.

Working method

Presencial

Program

1. Introduction
  1.1 - Evaluation of interventions and impact studies.
  1.2 - Prospective evaluation and retrospective evaluation.
  1.3 - Micro and macro evaluation
  1.4 - Definition of the evaluation objectives.
  1.5 - Planning and evaluation methodologies.

2. Methodologies based on impact multipliers
  2.1 - Classical multiplier theory
     2.1.1 - Conceptual framework.
     2.1.2 - Monetary, fiscal and Keynesian multipliers.
     2.1.3 - Economic-based multiplier.
  2.2 - Leontief model
     2.2.1 - Conceptual framework.
     2.2.1 - Input-output matrix and supply-use tables.
     2.2.2 - Quantification of direct, indirect and induced impacts.

3. Cost-benefit analysis methodologies
  3.1 - Analytical model.
     3.1.1 - Conceptual framework.
     3.1.2 - Shadow prices
        3.1.2.1 - Stated preferences models (contingent valuation)
        3.1.2.2 - Revealed preferences models (hedonic prices)
     3.1.3 - Valuation of non-monetary impacts and correction of externalities.
  3.2 - Performance evaluation.
     3.2.1 - Financial analysis.
     3.2.2 - Economic analysis.
     3.2.3 - Sensitivity and risk analysis.

4. Decomposition methodologies into explanatory factors
  4.1 - Growth accounting methodologies
     4.1.1 - Conceptual framework
     4.1.2 - Single factor and multifactorial productivity analysis.
     4.1.3 - Locational and industry mix factors (classical shift-share analysis and shift-share regression analysis).
  4.2 - Modeling of impact factors
     4.2.1 - Conceptual framework
     4.2.2 - Differences-in-differences regression models
     4.2.3 - Regression discontinuity analysis.

Mandatory literature

Gertler, Paul J., et al.; Impact Evaluation in Practice, World Bank Group, 2016. ISBN: 978-1-4648-0780-0
Belli, P. et al.; Handbook of Economic Analysis of Investment Operations, World Bank Group, 2001. ISBN: 0-8213-4850-7
Miller, R. E., and Blair, P. D. ; Input-output analysis: foundations and extensions. Cambridge, Cambridge University Press, 2009. ISBN: 978-0-511-65103-8
European Commission ; Guide to Cost-Benefit Analysis of Investment Projects., European Union, 2015. ISBN: 978-1-4648-0780-0
GONG, Binlei; New growth accounting, American Journal of Agricultural Economics, 2020. ISBN: 1467-8276
IMBENS, Guido W.; LEMIEUX, Thomas; Regression discontinuity designs: A guide to practice., Journal of Econometrics, 2008. ISBN: 0304-4076
ROTH, Jonathan, et al; What's Trending in Difference-in-Differences? A Synthesis of the Recent Econometrics Literature, Cornell University, 2022

Complementary Bibliography

Leontief, W.; Input-output economics. , Oxford University Press, 1986. ISBN: 0-19-503525-9
United Nations; Handbook on Supply, Use and Input-Output Tables with Extensions and Applications, United Nations, 2018. ISBN: 978-92-1-0
Drèze, J., and Stern, N.; The theory of cost-benefit analysis. In Handbook of public economics , Elsevier Science Publishers , 1987. ISBN: 9780080570839

Teaching methods and learning activities

Theoretical-practical based classes with presentation of case studies.

Software

Excel
Eviews

Evaluation Type

Distributed evaluation without final exam

Assessment Components

Designation	Weight (%)
Teste	60,00
Trabalho escrito	40,00
Total:	100,00

Amount of time allocated to each course unit

Designation	Time (hours)
Frequência das aulas	42,00
Estudo autónomo	60,00
Trabalho escrito	60,00
Total:	162,00

Eligibility for exams

Evaluation consists on a working group study (with a maximum of 3 students) and a written test (to be carried out within the first final exam).

Calculation formula of final grade

Final classification = 0.4 x classification of the working group study + 0.6 x classification of the final examen.

A minimal grade of 7 points in final test is required.