AØKA08079U Health Economics

Volume 2016/2017

MSc programme in Economics – elective course
MSc programme in mathematics-economics


Health economics falls within the umbrella of Public Economics, i.e., the course studies the interaction between health care providors, patients, governments and insurers. It evolves around the demand for health and health care, supply of health care, (assymetric) information economics, economics of health innovation, health policy and public health economics. Hence, the course in Health Economics provides the student with solid knowledge about a wide range of health economic models and applications.

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.

In short, the course provides a thorough overview of health care systems and peculiarities of the Danish Health Care sector, understanding “health” and aging as economic concepts combined with empirical insights, fetal origins hypotheses, issues of assymetric information in health insurance markets combined with heterogeneity in risk and preferences for insurance, medical insurance and health care use, health care providers and their incentives, and pharmaceutical markets.

Moreover, the course presents and discusses ideas of how state-of-the-art research handles identification issues in emprical health economic work.

Learning Outcome

After completing the course, the student should be able to:


  • Explain, discuss and criticize central health economic concepts and theories related to health behaviors of patients and professionals

  • Being able to account for traits of Beveridge, Bismarkian and US health care systems, identify determinants of variation in health care expenditure and relate them to outcomes

  • Reflect on the identification issues in health econometric applications

  • Identify health economic trade-offs in the health care sector in Denmark and internationally

  • Discuss health economic issues in a fairly clear and organized way and relate it to empirical findings


  • being able to understand and extract relevant information from scientific papers in applied health economics

  • being able to analyze specific health economic issues, from the perspective of an economic model


  • Launch economic concepts into policy recommendation in the health care sector

  • Develop research designs in health economic applications

  • Connect, combine or adapt general ideas and concepts to specific health economic problems under consideration

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 (textbook) 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 and identification. The very good student demonstrates a deep understanding of the theoretical and empirical models presented in the research articles of the course, and is able to connect, combine or adapt general ideas and concepts to specific health economic problems under consideration.

Textbook (for basic understanding):

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

Research Articles (for deeper understanding):

  1. 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.

  2. Almond, D. Currie, J. (2011a). Killing Me Softly: The Fetal Origins Hypothesis. Journal of Economic Perspectives, 25(3), 153–172.

  3. Almond, D. Currie, J. (2011b). Human Capital Development before Age Five. Handbook of Labor Economics, Volume 4b, DOI: 10.1016/​S0169-7218(11)02413-0.

  4. Person and Rossin-Slater, 2016, “Family Ruptures, Stress, and the Mental Health of the Next Generation”, forthcoming in American Economic Review

  5. Black et al., 2015. Does Grief Transfer Across Generations? Bereavements During Pregnancy and Child Outcomes. American Economic Journal: Applied Economics, Forthcoming.

  6. Cutler, D.M. and Lleras-Muney,A., 2006. 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.

  7. Cutler et al. (2006). The Determinants of Mortality, Journal of Economic Perspectives, 20(3), 97–120.

  8. Dalgaard, C-J., Strulik, H., 2014. “Optimal Aging and Death: Understanding the Preston Curve”, Journal of the European Economic Association 12, 2014, 672-701.

  9. Lleras-Muney A., 2005. The Relationship Between Education and Adult Mortality in the United States. Review of Economic Studies, 72, 189–221.

  10. Ruhm, C.J. 2001. ARE RECESSIONS GOOD FOR YOUR HEALTH? Quarterly Journal of Economics, 2001.

  11. 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.

  12. 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

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

  14. Howard, David H., Peter B. Bach, Ernst R. Berndt, and Rena M. Conti. 2015. "Pricing in the Market for Anticancer Drugs." Journal of Economic Perspectives, 29(1): 139-62.

  15. 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.

  16. Fadlon, I, Nielsen, TH, “Household Responses to severe health shocks and the design of social insurance”. NBER working paper http:/​/​www.nber.org/​papers/​w21352.pdf

  17. 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.

  18. 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.

  19. Olejaz, M, Juul Nielsen, A, Rudkjøbing, A., Birk, HO, Krasnik, A, Hernandez-Quevodo, C. “Health Systems in Transisition, Denmark, Health System Review” ,Vol. 14 No.2 2012 http:/​/​www.euro.who.int/​__data/​assets/​pdf_file/​0004/​160519/​e96442.pdf

  20. Finkelstein, A., Gentzkow, M., and Williams, H. (2014), “Sources of Geographic Variation in Health Care: Evidence from Patient Migration,” Working Paper 20789, National Bureau of Economic Research

  21. Fisher, E. S., Wennberg, D. E., Stukel, T. A., Gottlieb, D. J., Lucas, F. L., and Pinder, E. L. (2003), “The Implications of Regional Variations in Medicare Spending. Part 1: The Content, Quality, and Accessibility of Care,” Annals of Internal Medicine, 138(4): 273-287.

  22. Fisher, E. S., Wennberg, D. E., Stukel, T. A., Gottlieb, D. J., Lucas, F. L., and Pinder, E. L. (2003), “The Implications of Regional Variations in Medicare Spending. Part 2: Health Outcomes and Satisfaction with Care,” Annals of Internal Medicine, 138(4): 288-298.

  23. Doyle, J. (2011), “Returns to Local-Area Healthcare Spending: Evidence from Health Shocks to Patients Far from Home,” American Economic Journal: Applied Economics, 3(3): 221-243.

  24. Doyle, J., Graves, J., Gruber, J., and Kleiner, S. (2015), “Measuring Returns to Hospital Care: Evidence from Ambulance Referral Patterns,” The Journal of Political Economy, 123(1): 170-214.

BA in Economics or similar.
The lectures take an “active learning” approach in which students students engage in activities during the lectures. The purpose is to let the students reflect actively on the issues under consideration at the given lecture.
Therefore, the lectures not only consist of classic lecturing, but also a lot of the time at lectures are dedicated to short student presentations and discussions, quizzes, padlet exercises, short written assignments and small group work that force the students to actively engage in the lectures. Many of these activities are based on online tools provided by padlet.com, socrative.com and absalon.
Many activities result in written work that aligns with the final assement (three hour closed book written exam).

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

Timetable and venue:
To see the time and location of classroom please press the link under "Se skema" (See schedule) at the right side of this page (16E means Autumn 2016).

You can find the similar information partly in English at
-Select Department: “2200-Økonomisk Institut” (and wait for respond)
-Select Module:: “2200-E16; [Name of course]””
-Select Report Type: List
-Select Period: “Efterrår/Autumn – Weeks 30-3”
Press: “ View Timetable”
  • 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.
The exam assignment is in English and can be answered in English or in Danish. Language must be chosen at the course registration.
Exam registration requirements


Without aids
Marking scale
7-point grading scale
Censorship form
External censorship
100 % censorship
Exam period

The exam will take place December 21, 2016 at Peter Bangs Vej 36. 2000 Frederiksberg http:/​/​pc-eksamen.ku.dk/​pc_exam The exact time of the exam will be informed in the Self-Service at KUnet.

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).


The written re-exam takes place February 14 , 2017 at Peter Bangs Vej 36. 2000 Frederiksberg http:/​/​pc-eksamen.ku.dk/​pc_exam The exact time of the exam will be informed in the Self-Service at KUnet mid-July.

If only a few students have registered for the re-exam, the exam might change to an oral exam including the date for the exam, which will be informed  by the Examination Office.


Criteria for exam assesment

Students are assessed on the extent to which they master the learning outcome for the course.

To receive the top grade, the student must be able to demonstrate in an excellent manner that he or she has acquired and can make use of the knowledge, skills and competencies listed in the learning outcomes.