AØKA08079U Health Economics

Volume 2015/2016

Elective at MSc in economics
MSc programme in mathematics-economics


Overview of health care systems and peculiarities of the Danish Health Care sector, understanding “health” as an economic concept and empirical insights, health insurance markets and heterogeneity in risk, medical insurance and health care use, health care providers and incentives, and pharmaceutical markets.

Learning Outcome

The course in Health Economics aims to provide the student with solid knowledge about a wide range of health economic models and applications. The student is presented to health policy, public health economics, peculiarities in markets for health care services, health insurance, and regulation of pharmaceutical markets.
As an applied micro course, the student sees how fundamental issues in often complex health economic problems and dilemmas can be analyzed using the toolbox of the undergraduate level micro courses.

The scope of the course is both theoretical and empirical, and closely related to practical problems in health care production, administration and social insurance. The course therefore provides the student with a good foundation for administrative and analytical positions in various organizations in the health care sector.
At the end of the course, the student will be able to analyze specific health economic issues, from the perspective of an economic model. For successful completion of the course, the student demonstrates a reasonable insight into the underlying economic issues in the health care sector, is able to draw on basic modeling frameworks in analyzing such problems, and presents a discussion of these issues in a fairly clear and organized way and relate it to empirical findings. The very good student demonstrates a deep understanding of the theoretical models presented in the course, and is able to connect, combine or adapt general ideas and concepts to specific health economic problems under consideration.


Health Economics, Jay Bhattacharya, Timothy Hyde and Peter Tu. Palgrave Macmillan.

Journal articles (a selection of the following):

Arrow (1963) “Uncertainty and the Welfare Economics of Medical Care” American Economic Review 53(5): 941-973

Grossman, M. (2000): The human capital model of the demand for health. In A.J. Culyer and J.P. Newhouse (eds.):  Handbook of Health Economics, Vol. 1A, chapter 7, p. 347-408.

Cutler, DM and Lleras-Muney A. Education and Health: Evaluating Theories and Evidence. In RF Schoeni, JS House, G Kaplan and H Pollack (Eds.): Making Americans Healthier: Social and Economics Policy as Health Policy, New York: Russell Sage Foundation 2008. Published as NBER: http:/​/​www.nber.org/​papers/​w12352.

Almond, D and Currie, J, Human Capital development before age five, Handbook of Labor Economics vol 4b. 2010.

Rothschild and Stiglitz (1976) “Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information” Quarterly Journal of Economics 90 (4): 629-649

Cutler, D., Finkelstein, A. and McGarry, K. ” Preference Heterogeneity and Insurance Markets: Explaining a Puzzle of Insurance”,  American Economic Review: Papers & Proceedings 2008, 98:2, 157–162

Almond, D and Currie, J, ”Killing me softly: The Fetal Origins Hypothesis”, Journal of Economic Perspectives—Volume 25, Number 3—Summer 2011—Pages 153–172

Black, Sandra E., Paul J. Devereux, and Kjell G. Salvanes, From the Cradle to the Labor Market? The Effect of Birth Weight on Adult Outcomes, Quarterly Journal of Economics (2007) 122 (1): 409-339


Arendt , Jacob Nielsen (2005), Does education cause better health? A panel data analysis using school reforms for identification, Economics of Education Review, Vol. 24, issue 2, April 2005, pp. 149-160


Einav, Liran and Amy Finkelstein, ”Selection in Insurance Markets: Theory and Empirics in Pictures”, Journal of Economic Perspectives—Volume 25, Number 1—Winter 2011—Pages 115–138


Cutler, David M., Amy Finkelstein, and Kathleen McGarry. 2008. "Preference Heterogeneity and Insurance Markets: Explaining a Puzzle of Insurance." American Economic Review, 98(2): 157-62.


Kremer, Michael. 2002. "Pharmaceuticals and the Developing World ." Journal of Economic Perspectives, 16(4): 67-90.


Pedersen, K.M., Christiansen, T. & M. Bech (2005). The Danish health care system: evolution  - not revolution - in a decentralized system. Health Economics 14: S41-S57.


Olejaz M, Juul Nielsen A, Rudkjøbing A, Okkels Birk H, Krasnik A, Hernández-Quevedo C. Denmark: Health system review. Health Systems in Transition, 2012, 14(2):1 – 192.


Jensen, V.M. (2013): Happy Doctor Makes Happy Baby? – Incentivizing Physicians improves Quality of Prenatal Care, forthcoming, Review of Economics and Statistics, published online June 20, 2013.


Siciliani L, Hurst J (2005). Tackling excessive waiting times for elective surgery: a comparative analysis of policies in 12 OECD countries . Health Policy 72: 201-215.


Feldman R. (1994). The cost of rationing medical care by insurance coverage and by waiting. Health Economics; 3(6): 361-72.


Cutler DM, Ed Glaeser and Jesse M. Shapiro, ”Why Have the Americans Become More Obese?” Journal of Economic Perspectives—Volume 17, Number 3—Summer 2003—Pages 93–118


Bleakley, H., 2007. Disease and development: evidence from hookworm eradication in the American South. Q. J. Econ. 122 (1), 73–117.


Bhalotra, S., Venkataramani, A., 2012. The captain of the men of death and his shadow: early life health, human capital Investment and institutions. (RR JPE).


Jayachandran, S., Lleras-Muney, A., 2009. Life expectancy and human capital investments: evidence from maternal mortality declines. Q. J. Econ. 124 (1), 349–397.


Jayachandran, S., Lleras-Muney, A., Smith, K.V., 2010.Modernmedicine and the twentieth century decline in mortality: evidence on the impact of sulfa drugs. Am. Econ. J. Appl. Econ. 2, 118–146 (April).


Lucas, A.M., 2010. Malaria eradication and educational attainment: evidence from Paraguay and Sri Lanka. Am. Econ. J. Appl. Econ. 2, 46–71.

Acemoglu, D., Johnson, S., 2007. Disease and development: the effect of life expectancy on economic growth. J. Polit. Econ. 115 (6), 925–985.


Feyrer, J., D. Politi, Weil, D. The Cognitive Effects of Micronutrient Deficiency: Evidence from Salt Iodization in the United States. NBER Working Paper 19233.


S. Black, A. Butikofer, P. Devereux, K. Salavanes, 2014 . This Is Only a Test? Long-Run Impacts of Prenatal Exposure to Radioactive Downfall from Nuclear Weapon Testing”


Almond, D., 2006 “Is the 1918 Influenza Pandemic Over? Long-term Effects of In Utero Influenza Exposure in the Post-1940 U.S. Population” Journal of Political Economy, 114 (August 2006), 672-712.


Adam Isen et al. (2015). Every Breath You Take — Every Dollar You’ll Make: The Long-Term Consequences of the Clean Air Act of 1970. (RR JPE).


Barreca et al. (2013.). Adapting to Climate Change: The Remarkable Decline in the U.S. Temperature-Mortality Relationship over the 20th Century. (Forthcoming JPE)


Alsan, M., C. Goldin (2015). Watersheds in Infant Mortality: The Role of Effective Water and Sewerage Infrastructure, 1880 to 1915. Working paper.


Barreca, A, K. Clay, J. Tarr,. 2014. Coal, Smoke, and Death: Bituminous Coal and American Home Heating. NBER Working Paper.


Barreca, Al.. 2010. The Long-Term Economic Impact of In Utero and Postnatal Exposure to Malaria. Journal of Human Resources 45(4): 865-892.


Cutler et al. (2006). the Determinants of Mortality, Journal of Economic Perspectives—Volume 20, Number 3—Summer 2006—Pages 97–120.



Miller, G. (2008). "Women’s Suffrage, Political Responsiveness, and Child Survival in American History", Quarterly Journal of Economics.

BA in Economics or similar.

The course consists of 2 hours of classes (lectures) every week and 2x2 hours every second week for 14 weeks.

For enrolled students please find more information of courses, schema, rules etc at

Time and classroom:
For time and classroom please press the link under "Se skema" (See schedule) at the right side of this page (15E means 2015 Efterår (Autumn))
  • Category
  • Hours
  • Exam
  • 3
  • Lectures
  • 42
  • Preparation
  • 161
  • Total
  • 206
7,5 ECTS
Type of assessment
Written examination, 3 hours under invigilation
Individual written closed-book exam at the computers of Copenhagen University
Without aids
Marking scale
7-point grading scale
Censorship form
External censorship
100 % censorship
Exam period

The exam will take place 22 December 2015 at Peter Bangs Vej 36. 2000 Frederiksberg http:/​/​pc-eksamen.ku.dk/​pc_exam

For enrolled students more information about examination, exam/re-sit, rules etc. is available at the student intranet for Examination (English) and student intranet for Examination (KA-Danish).


Same as the ordinary exam. But if only a few students have registered for the re-exam, the exam might change to an oral exam. This means that the examination date also will change.


Criteria for exam assesment

The student must in a satisfactory way demonstrate that he/she has mastered the learning outcome of the course.