AØKA08079U Health Economics

Volume 2020/2021

MSc programme in Economics – elective course


The PhD Programme in Economics at the Department of Economics  - elective course with resarch module (PhD students must contact the study administration and the lecturer in order to write the research assignment)


MSc programme in mathematics-economics


The teaching in this course may be changed to be taught either fully or partly online due to COVID-19. For further information, see the course room on Absalon. The time, place and type of assessment used for the exam may also be changed due to COVID-19, and any further information will be announced under the panel “Exam”.

Health economics falls within the umbrella of Public Economics. The course studies the interaction between health care providers, patients, governments and insurers. It evolves around the demand for health and health care, supply of health care, (asymmetric) 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 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 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: different health care systems including the Danish health care sector, “health” and aging as economic concepts, the fetal origins hypothesis, issues of asymmetric information in health insurance markets, health insurance and the demand for health care, 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 empirical health economics.

Learning Outcome

After completing the course the student is expected to be able to:



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

  • 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.



  • Assess and extract relevant information from scientific papers in applied health economics.

  • Analyze specific health economic issues, from the perspective of an economic model.



  • Implement economic concepts into policy recommendation in the health care sector.

  • Develop and manage research designs in health economic applications

  • Combine or adapt general ideas and concepts to specific health economic problems under consideration and to participate carring through the solutions in relevant areas.

* = reading is syllabus


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

Research Articles:

  • *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.
  • * Dalgaard, C-J., Strulik, H., 2014. “Optimal Aging and Death: Understanding the Preston Curve”, Journal of the European Economic Association 12, 2014, 672-701.
  • * 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.
  • * Almond, D. Currie, J. (2011a). Killing Me Softly: The Fetal Origins Hypothesis. Journal of Economic Perspectives, 25(3), 153–172.
  • 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.
  • * 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 http:/​​/​​dx.doi.org/​​10.1162/​​qjec.122.1.409
  • *Person and Rossin-Slater, 2018, “Family Ruptures, Stress, and the Mental Health of the Next Generation”, American Economic Review , 108(4-5): 1214–1252 https:/​​/​​doi.org/​​10.1257/​​aer.20141406
  • * Black, S., Devereux PJ, Salvanes, K, 2016. “Does Grief Transfer Across Generations? Bereavements During Pregnancy and Child Outcomes.” American Economic Journal: Applied Economics, vol. 8, No 1. January 2016.
  • Matsumoto, Brett. 2018. "Family Ruptures, Stress, and the Mental Health of the Next Generation: Comment." American Economic Review, 108 (4-5): 1253-55. https:/​/​www.aeaweb.org/​articles?id=10.1257/​aer.20161124
  • * Cutler et al. (2006). The Determinants of Mortality, Journal of Economic Perspectives, 20(3), 97–120.
  • *Claus Thustrup Kreiner, Torben Heien Nielsen, Benjamin Ly Serena. Role of income mobility for the measurement of inequality in life expectancy.  Proceedings of the National Academy of Sciences Nov 2018, 115 (46) 11754-11759; DOI: 10.1073/pnas.1811455115
  •  *Raj Chetty; Michael Stepner, ; Sarah Abraham; Shelby Lin, ; Benjamin Scuderi,; Nicholas Turner; Augustin Bergeron; David Cutler “The Association Between Income and Life Expectancy in the United States, 2001-2014” Journal of the American Medical Association, . 2016;315(16):1750-1766. doi:10.1001/​​jama.2016.4226. https:/​​/​​healthinequality.org 
  •  *Lleras-Muney A., 2005. The Relationship Between Education and Adult Mortality in the United States. Review of Economic Studies, 72, 189–221.
  • *Katherine Baicker, Sendhil Mullainathan, Joshua Schwartzstein. Behavioral Hazard in Health Insurance. The Quarterly Journal of Economics, 130( 4), 2015, Pages 1623–1667, https:/​/​doi.org/​10.1093/​qje/​qjv029
  • * 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
  • Kremer, Michael. 2002. "Pharmaceuticals and the Developing World ." Journal of Economic Perspectives, 16(4): 67-90.
  • * 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.  
  • Williams, Heidi (2017), “How do patents Affect Research Investments?”, Annual Reviews of Economics. 9:441-69 http:/​​/​​www.annualreviews.org/​​doi/​​full/​​10.1146/​​annurev-economics-110216-100959
  • *Finkelstein, A., Gentzkow, M., and Williams, H. (2016), “Sources of Geographic Variation in Health Care: Evidence from Patient Migration” Quarterly Journal of Economics, (2016) 1681-1726 https:/​​/​​doi.org/​​10.1093/​​qje/​​qjw023
  • * 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.
  • * 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.  
  • * Laird, J and Nielsen, TH, “The Effects of Physician Prescribing Behaviors on Prescription Drug Use and Labor Supply: Evidence from Movers in Denmark” (working paper) https:/​​/​​scholar.harvard.edu/​​lairdja/​​publications/​​effects-physician-prescribing-behaviors-prescription-drug-use-and-labor-supply
  • Simon, David, “Does early Life Exposure to Cigarette Smoke Permanently Harm Childhood Welfare? Evidence from Cigarette Tax Hikes” American Economic Journal: Applied Economics 2016, 8(4)> 128-159
  • * 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.
  • 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.
  • 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
  • *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. http:/​​/​​dx.doi.org.ep.fjernadgang.kb.dk/​​10.1016/​​j.healthpol.2004.07.003
  • * Fadlon, I, Nielsen, TH, (2017a) “Family labor supply responses to severe health shocks”. NBER working paper http:/​​/​​www.nber.org/​​papers/​​w21352.pdf
  • Dobkin, C, Finkelstein, A., Kluender, R., Notowidigdo, MJ, “The Economic Consequences of Hospital Admissions”, https:/​​/​​economics.mit.edu/​​files/​​13738
  • * Fadlon, I, Nielsen, TH (2019), “Family Health behaviors”. American Economic Review, 109 (9): 3162-91. https:/​/​www.aeaweb.org/​articles?id=10.1257/​aer.20171993
None exept the formal requirements.
The lectures take an “active learning” approach in which 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.

All students are expected to contribute to at least one poster session, where students in groups prepare and present a poster on a paper from the syllabus. Prior to the poster session the groups meet with the lecturer to ensure sufficient quality. There is sign up for the poster sessions at one of the first lectures.

Many activities result in written work that aligns and prepares the students for the final exam.
2 hours lectures 1 to 2 times a week from week 36 to 50 (except week 42).

The overall schema for the Master can be seen at KUnet:
MSc in Economics => "Courses and teaching" => "Planning and overview" => "Your timetable"

Timetable and venue:
To see the time and location of lectures please press the link under "Timetable"/​"Se skema" at the right side of this page. E means Autumn.

You can find the similar information partly in English at
-Select Department: “2200-Økonomisk Institut” (and wait for respond)
-Select Module:: “2200-E20; [Name of course]”
-Select Report Type: “List – Weekdays”
-Select Period: “Efterår/Autumn – Weeks 31-5”
Press: “ View Timetable”
  • Category
  • Hours
  • Lectures
  • 42
  • Preparation
  • 161
  • Exam
  • 3
  • Total
  • 206
Peer feedback (Students give each other feedback)


Students will receive oral feedback from lecturer and peers via poster sessions. Moreover, online quizzes provides immediate feedback during lectures, and small written assignments will receive general plenary feedback.

The course contains integrated office hours as preparations for student presentations.

7,5 ECTS
Type of assessment
Written assignment, 3 hours
The exam assignment is given in English and must be answered in English.
Due to the Corona crisis, the Board of Study has decided to change the regular exams and the re-sit exams in the autumn semester to written online take-home exams. Both exams are still individual.

During the exam, it is not allowed to communicate with others about the exam assignment nor the solution at all. It is also prohibited to distribute data regarding the solutions to anyone. If this or alike actions happens, it will be regarded as cheating and plagiarism.

Please
- https:/​/​kunet.ku.dk/​newsroom/​study-messages/​Pages/​Information-about-the-winter-exams-at-the-Department-of-Economics.aspx
- https:/​/​kunet.ku.dk/​newsroom/​study-messages/​Pages/​Information-on-rescheduled-PBV-winter-exams-.aspx
Exam registration requirements

There are no requirements during the course that the student has to fulfill to be able to sit the exam.


All aids allowed
Marking scale
7-point grading scale
Censorship form
No external censorship
for the written exam. The exam may be chosen for external censorship by random check.
Exam period

The exam takes place:

8 January 2021


Exam information:

The exact time will be available in Digital Exam.


In special cases, the exam date can be changed to another day and time within the exam period.


For enrolled students more information about examination, rules, aids etc. is available at   Master students (UK) and Master students (DK).



The written reexam takes place:

24 February 2021


NOTE: If only few students register for the written re-exam, the re-exam might change to a 20 minutes online oral examination with aids, but without preparation time.


If changed to an oral exam, the date, time and place for the exam will be informed by the Examination Office.


Reexam information:

Information about the reexam will be available in the Digital Exam  early February.


More information is available at  Master students (UK)and  Master students (DK).  

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 with no or only a few minor weaknesses be able to demonstrate an excellent performance displaying a high level of command of all aspects of the relevant material and can make use of the knowledge, skills and competencies listed in the learning outcomes.


In this course 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. The student is able to refer to and extract relevant points form the academic papers from the syllabus, and relate them to the problem under consideration.


For successful completion of the course, the student demonstrates a reasonable (textbook level) 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.