Chapter 1 Introduction and Overview

1.1 The Course and Content

This online resource serves as the textbook for the Public Health as a Public Good (CPH:3220) course offered in the College of Public Health at the University of Iowa. The course covers an economic approach to understanding public health through the lens of economics and public finance. We will have a specific focus on externalities, public goods, public finance, political economics, behavioral economics, and empirical methods as applied to public health.

I want to stress that while this is a public health class, we will be understanding our topics through an economic lens. We will frame our discussions in economic terms and theories. However, this is not an economics course and so our use of these tools will focus on graphical manipulations and concepts rather than equations. The text and course assume little-to-no economic background and cover the concepts used during the first chapters and weeks of the class.

We will start with a review of basic microeconomic theory, including supply and demand and utility theory. While these topics may seem somewhat unrelated to public health, they provide the theoretical foundation for our later analysis of externalities, public goods, and policy solutions.

Once we have a firm and common understanding of these basic microeconomics concepts, we will move into a discussion of externalities. We will cover externalities as a concept and discuss why they happen before moving on to both market and non-market solutions to externalities. Once we cover some externalities on a high level, we dive into a few externality case studies such as air pollution, climate change, and free parking.

Next, we’ll cover public goods, which are goods like a lighthouse where there is no means to exclude people from using the good or service and use by one does not impair use by others. There is no way to limit the use of a lighthouse only to ships that pay for the service and there is no diminishing in usefulness of the lighthouse when more ships use the light. These goods are different in critical ways from other goods and are worth specific attention. We’ll discuss ways in which the are under provided and also policies to address this issue.

Public health services are often provided by the government and so a brief digression into political economics and public finance is important to understanding what is done and why. We’ll cover the basics of why governments behave the way they do and how they are funded (taxes). We’ll also cover the basics of cost-benefit analysis and how to properly frame such questions.

After creating a theoretical basis, we’ll cover some basic empirical methods used in health economics. While this section will not be a replacement for a biostatistics or econometrics course, it will cover at a conceptual level the methods used to determine if an intervention is successful or not. Specifically, we’ll discuss the basics of regression analysis, instrumental variables, differences-in-differences, and regression discontinuity. We’ll have an introduction to cost-benefit analysis of different policy changes.

We have a few weeks where we will, as a class, decide to cover education, taxes, government budgets, or state/local governments. These topics will be decided as the semester progresses.

Finally, we’ll end the semester with a discussion of behavioral economics and how the insights from this rapidly growing field can provide useful insight to the design of public health interventions and help us understand why people behave the way they do.

This course is not simply the text. I hope to have in-class or virtual discussions throughout the semester as we cover topics relevant to ongoing questions of public policy.

To contact me or make suggestions for this book, email Please include “Public Health as a Public Good” at the start of the subject line. You can also access the GitHub repo through the link at the top of the page.