The Economics of Social Issues

May 8, 2001

College of Business
EC 211 – Course Outline
Semester: Spring 2000
Class Sessions: The class meets on Wednesdays from 7:45-10:10

Course Description

This course utilizes economic principles and techniques to analyze social issues. Topics include: the allocation of resources, the distribution of wealth and income, health care, crime, education, environmental, tax and regulatory issues. In addition to providing an economic analysis of four current issues, you will participate in a service learning project as a means of applying the concepts discussed in class and examining the complexities often involved in projects which entail a number of potential economic and social impacts.

Course Learning Objectives

You will learn to apply basic economic principles to analyze current social issues including the allocation of resources, the distribution of wealth and income, health care, crime, education, environmental, tax and regulatory issues. The complex interactions between the economic and social impacts of issues will be analyzed in classroom discussions, position papers on current issues, and through participation in a service learning project. In the service learning project, we will work with a neighborhood group, Trashbusters, and the Bridgeport Regional Business Council to study the impact of the proposed expansion of the Seaview Avenue Corridor, in Bridgeport, on the community. We will analyze potential economic, environmental, community, health and environmental justice impacts on the community. The analysis and recommendations will be presented in both a written form, and a PowerPoint presentation to members of Trashbusters and the Bridgeport Regional Business Council. In addition, you will be required to write four “position” papers evaluating current social issues. Two of these papers will be presented to the class. The service learning project and position papers are intended to enhance analytical skills and both written and oral communication skills.

Prerequisites: 3 credits in economics

Course Text and Supporting Materials

Text Book: Economics of Social Issues, by Sharp, Register and Grimes; Irwin, McGraw-Hill, 14th edition and any principles of economics text

Grading Policy:
Service Learning Project 30%
2 written position papers 20%
2 written/presented papers 40%
Class participation 10%

Service Learning Project

You will be required to participate in a service learning project. We will work with a neighborhood group, Trashbusters, and the Bridgeport Regional Business Council to study the impact of the proposed expansion of the Seaview Avenue Corridor in Bridgeport, on the community. We will analyze the potential economic, environmental, community, health and environmental justice impacts on the community. The analysis and recommendations will be presented in both a written form, and a PowerPoint presentation to members of Trashbusters and the Bridgeport Regional Business Council. Details of the project are attached.

Position Papers and Presentations

You must write four “position” papers on current social issues. You may select topics from the list below and/or devise your own topics (subject to my approval). After thoroughly researching the issue selected from alternative perspectives, write a 6-8 page (single spaced) typed paper which includes:

  • an overview of the issue
  • a thorough economic analysis of the pros and cons of proposed policies or alternative solutions to the issue
  • include graphs, statistics, etc to provide support for your claims
  • your recommendation supported by evidence
  • references

Two of the papers will be summarized in five to ten minute presentations to the class. The papers presented to the class are worth 20% each, while the papers submitted (but not presented) are worth 10% each.

Class Participation: You are expected to attend class and participate in classroom discussions. The class participation grade will reflect preparation for class discussions and the quality of participation in class discussions.

Additional Requirements:

  1. Attendance is expected and as required by University regulations, absences will be reported to the registrar.
  2. While class lectures will emphasize the most important and/or the most challenging concepts, you are required to read and study the entire chapter unless otherwise instructed.
  3. Assignments must be turned in, and presentations made, as scheduled. Late assignments will generally not be accepted and certainly will not be accepted without prior instructor permission.

Schedule and Assignments

Tentative schedule:
Date Economic Principles to be Applied Social Issues Analyzed Readings

9/6 Introduction

9/13 Our resources are Scarce given the extent of our “wants”
Income and wealth distribution
Global resource allocation Ch 1,7

9/20 Scarcity implies Tradeoffs or Choices
Education versus national defense
Medicare versus medicaid
The budget surplus Ch 3,15

9/27 The best decisions are based on Marginal analysis
FAA Safety Rules
The “right” level of Crime
Fighting cancer versus heart attacks Ch 4

10/4 Continued

10/11 Markets often lead to good outcomes
Market versus non-market systems Ch 2

10/18 The role of Prices
Health Care
Water shortages
Minimum wage

10/25 Market failure
Pollution and other externalitites
Public goods
Information effects Ch 5, 11

11/1 When the government can improve market outcomes
Antitrust regulation
Title 9
Protecting private property rights
Ch 6,8,14

11/8 Incentives matter
The US tax system
Using the tax system to influence behavior
Ch 13

11/15 Most people benefit from Free Trade
The theory of Free Trade

11/22 Thanksgiving

11/29 Most people benefit from Economic growth
The determinants of economic growth
Historical analysis of growth
Global growth rates
Recent experience in US Ch 16

12/6 Seaview Avenue Presentation


The course outline and schedule are tentative and may be changed at my discretion.

Position Paper Topics

Feel free to see me with your suggestions for topics other than those listed below. Alternative topics must be approved and scheduled.

Paper topics and dates for presentations to be made and papers turned in are:

Due September 27:
Do you believe that the United States should increase humanitarian aid to lesser developed nations where poverty is widespread? What form of aid would you recommend? Why? If so, how should this increase in aid be financed? If not, why not?

The US is arguing that emission cuts under the Kyoto treaty to curb global warming should be reduced to account for the level of a nation’s carbon absorbing forests. Do you believe this argument is valid? What are the impacts of such an amendment?

The US has a number of programs aimed at alleviating poverty and related problems. Select one such program (for example welfare, WIC, EIC), outline the program’s goals and argue whether or not it has been successful. Do you recommend maintaining the program? Why or why not? Would you suggest any changes?

There are also a number of global organizations which aim to alleviate poverty (see the websites at the end of chapters 1 and 7). Investigate several programs and describe those projects have been most and least successful. What factors do you think determine success?

Due October 4:
Research the positions of Vice-President Gore and Governor Bush regarding what they intend to do with the budget surplus and their corresponding policies regarding tax cuts. Analyze the candidates’ plans? What do you believe should be done? Why?

Due October 11:
Research the use of airbags. These devices were mandated by Federal Law to provide higher levels of safety. Carefully outline all of the costs and benefits of mandatory airbags. Do you believe the policy has been successful? Has the policy had any unintended consequences? Explain.

Due October 18:
How should a city decide on the optimal level of crime prevention to provide? What are the costs and benefits of crime prevention? How can the costs and benefits be assessed? Large cities generally spend more per capita on crime prevention than small towns. Economists suggest that this is due to differences in both the costs and benefits of (1) committing crimes and (2) preventing crimes in large cities compared to small towns. What do you think these differences in costs and benefits might be?

Given a fixed amount of research spending by an agency such as the NIH, how should funds be allocated between different health problems, for example research on aids, cancer and diabetes?

Consider the role and goals of the FAA. Is it possible for the agency to require “too much” safety? What does this imply? Why do you think that automobile manufacturers advertise the safety of vehicles while airlines never mention safety in ads?

Due October 25:
As the debate over health care reform continues, systems such as the Canadian system of universal coverage will be proposed as solutions to the US system. How does the Canadian system provide access to all citizens? Compared to the US system, what are the advantages and disadvantages of the Canadian system?

Many areas in the US and elsewhere wrestle with temporary or permanent water shortages. Water is seldom allocated using a market system. Describe the pros and cons of using prices versus non-price mechanisms to allocate water.

Consider the US system of agricultural price supports. Why does the government intervene? What are the implications of the policy? Do you believe the current policy works? Explain your response.

Due November 1:
Investigate the recent lawsuit filed by some Northeastern states in conjunction with the EPA against Midwest utilities because of the acid rain produced by these firms. Explain the economic issues involved in this debate. Propose a solution.

The FDA is often criticized for its decisions regarding whether new medicines should be permitted to go on sale in the US. The agency aims to protect consumers from “unsafe” use but is often criticized because of the resulting delays in bringing promising new drugs to market. What are the costs and benefits that the FDA must weigh? How should they reach decisions?

Due November 8:
Why was Title IX initiated? Has it been successful? What has been achieved? What has the initiative cost? Include your recommendations.

The AOL-Time-Warner merger will probably be challenged on antitrust grounds. Research the merger and the regulatory issues. Do you believe the merger should be permitted? Explain your response carefully. What social benefits and costs do you think would emerge from the merger?

Research the case against Napster brought by the music industry. What so you believe are the relevant issues? What would you recommend as a resolution to this controversy? Explain the costs and benefits of your proposal.

Due November 15:
Will the increase in cigarette taxes instituted last year significantly reduce teen smoking, as expected? Why or why not? What other policies might achieve this objective? What is your recommendation?

Consider the legalization of marijuana. What factors should be considered in weighing the pros and cons? What non-monetary costs and benefits should be incorporated in the analysis?

Given a federal objective of reducing illegal drug use, what policies do you think will be most and least effective? Carefully explain your response.

Republicans have recently voted to repeal the so-called marriage penalty, while President Clinton has vowed to veto any repeal. What is the marriage penalty, why does it exist and what do you recommend?

Due November 29:
Should a prescription drug benefit be added to Medicare? Examine several of the proposals discussed and detail the scope of benefits and the means of financing. Include your own specific recommendations.

Research the deregulation of electricity in California. What problems are occurring as a result of deregulation? How well do you think the deregulated industry will ultimately work? Explain your response.

Research the current debate over genetically modified foods and the provisions under which the Cartagena Protocol permits nations to ban GM foods. Do you think this provision will be used to inhibit free trade? Can you recommend an alternative?

Research productivity, output, employment and income levels (as well as any other variables you choose) during the 1980s and 1990s in the US and the country of your choice. Do differences in productivity appear to be related to differences in standards of living? What factors seem to be most important in leading to higher productivity? What policy implications arise from your analysis?

An analysis of the Economic, Environmental and Social Implications of the Proposed Seaview Avenue Industrial Corridor for the City of Bridgeport

To be undertaken as a service learning project by Sacred Heart University students in Fall 2000 in
EC 211 The Economics of Social Issues
CA 21 Honors Communications

For Trashbusters and the Bridgeport Regional Business Council

Under the direction of:
Dr. Bridget Lyons, assistant professor of economics, Sacred Heart University
Dr. Marion Calabrese, associate professor of English, Sacred Heart University
Teresa Ralabate, environmental consultant, Life Systems, Inc.
Phyllis Machledt, director of service learning, Sacred Heart University

1. The Seaview Avenue Industrial Corridor Project

The City of Bridgeport adopted a Strategic Plan in 1996 that specified economic development goals for the city over a 20 year period. Two important goals of the plan were to develop 20,000 job opportunities over the 20 year period and to grow the tax base. The strategic plan led to a development plan based on a strategy of: downtown revitalization, neighborhood reinvestment, waterfront recapture, and industrial recovery. The city believes that one of the most significant growth opportunities lies in the so-called Lake Success Project. This project is planned for a 450 acre site, located primarily in Bridgeport with about 75 acres in Stratford, which is owned by DuPont Corporation. The site was used for years as an ammunition testing site and is now undergoing environmental cleanup. Upon completion of the cleanup, DuPont says it plans to develop a low-density corporate campus park.

In order to maximize the development appeal of the site, the city believes that access must be improved since currently the only access is through existing residential neighborhoods. Thus the city has proposed the Seaview Avenue Industrial Corridor Project, an improved roadway aimed at providing convenient access from the recently constructed I-95 Interchange at exit 29 to Lake Success. The city expects that the project will also increase retention opportunities for businesses south of the site and improve development opportunities along the two-mile corridor. The roadway improvement is expected to cost about $125 million.
At this time, the Maguire Group is conducting preliminary engineering studies and environmental assessments. The firm plans to analyze the project and alternatives during the summer and fall of 2000. The firm plans to publish and distribute the environmental assessment in May 2001 for public comment in July 2001.

2. The History of Sacred Heart University’s Involvement in the Project

During the spring of 1999, Don Shea, a member of Trashbusters, a Bridgeport community group, contacted Phyllis Machledt, the director of service learning at Sacred Heart University, to request assistance in evaluating the impact of the proposed Seaview Aveue Industrial Corridor. She recommended contacting Dr. Bridget Lyons, professor of economics at the University. After several conversations with Mr. Shea, Dr. Lyons attended a public information meeting on the project where she met with members of Trashbusters and discussed what students might offer the group. Paul Timpanelli, President (??) of the Bridgeport Regional Business Center (BRBC), was also at the meeting and offered to discuss the project and related service learning opportunities. Professor Lyons concluded that the project would provide an excellent service learning opportunity for a course under development, The Economics of Social Issues. The students could meet the request of a local community group while gaining practical experience analyzing the numerous and complex issues faced by cities seeking economic development.

Realizing that the project would involve environmental issues, as well as economic and social issues, Professor Lyons contacted Teresa Ralabate, an environmental consultant at Life Systems Inc, who agreed to work as an environmental consultant for the group on a pro bono basis. Dr. Marion Calabrese, of the English department at Sacred Heart University, was also approached since so many of the issues involved communication. It was agreed that the Seaview Avenue Industrial Corridor would provide the basis for an interdisciplinary service learning project to be undertaken by students in Dr. Lyons’ Economics of Social Issues course and Dr. Calabrese’s Honors Communications courses during the Fall 2000 term.

During the summer Dr. Lyons, Dr. Calabrese and Ms. Ralabate, met with Paul Timpanelli and Janice Martin of BRBC, and Don Shea of Trashbusters. It was agreed by all that SHU students could serve the community’s needs by first, undertaking an independent analysis of the economic, environmental, and social implications of the proposed Seaview Avenue Industrial Corridor and second, developing a plan to disseminate the information gathered. The project’s scope and parameters were developed over the summer and approved. In August, Bethany Tassone of Maguire Group (the firm retained to prepare the Environmental Assessment and engineering study) contacted Dr. Lyons and offered to meet with the students as well.

3. The Proposal for an Interdisciplinary Service Learning Project Based on the Seaview Avenue Corridor Project

An economic analysis of the proposed Seaview Avenue Industrial Corridor will be conducted to identify potential benefits and costs to both public and private parties. The economic evaluation of any public policy initiative should include two components: an assessment of the costs and benefits of the proposal and consideration of how such costs and benefits will be allocated. The estimation of costs and benefits of a proposal includes measuring both the private and social costs and benefits. Social benefits include any improvements in social welfare, while social costs refer to reductions in social welfare. Indeed, the expected net impact on social welfare is the primary factor analyzed in most public policy debates. Private costs and benefits refer to reductions and improvements in the welfare of individuals or firms. Such costs and benefits are also important to analyze because they impact the net change in social welfare. Further, if the policy initiative involves corporate participation, the level of net private sector benefit will determine whether or not firm participation is expected to be profitable, and therefore likely. It is also necessary to consider how the expected social and private costs and benefits will be allocated since this will determine the impact of the policy, the sources and level of support and opposition, and the political viability of the proposal.

The Seaview Avenue Corridor proposal involves potential benefits and costs which might result from economic development, environmental, health and/or social factors.

The students undertaking the project evaluation will:

1. Identify general areas of potential impact
2. Each student will select an area of primary interest (economic development, environment, health, community or environmental justice) and form teams consisting of 2-4 students
3. Each team will identify and research specific benefits and costs in the selected area arising from the proposed corridor
4. On the basis of potential benefits and costs, develop recommendations aimed at maximizing benefits while minimizing costs
5. Develop a plan to disseminate information from the study
6. Incorporate research and recommendations into a written proposal and PowerPoint presentation
7. Presentation/Proposal to Trashbusters and BRBC

In order to develop a service learning project which could be completed in the confines of a 15 week semester, the first and third steps were begun during the summer. Students will research the potential impacts detailed below and may identify additional areas of potential impact through their research.

1. Areas of Potential Impact:

-Economic Development
-Environmental Justice

2. Students Identify Area of Primary Interest and Form Teams by Area

-students should select area of interest by September 15th
-teams of 2-4 students formed by September 20th

3. Teams Identify and Research Specific Costs and Benefits of Proposed Seaview Avenue Corridor

3.1 Identification of Specific Costs and Benefits by Area

a. Economic development
-development of more attractive commercial space environment along corridor
-development of improved highway access to significantly increase the likelihood of a corporate park developing in Lake Success
-new employment opportunities
-retention of current employment in area
-expansion of tax base

b. Environment
-increase in air pollution
-increase in surface runoff
-impact on storm sewage system
-impact on terrestrial animals/plants
-Riparian impacts
increase in surface water pollution
impact on animals/plants
impact on wetlands

-increase in noise pollution
-hazardous waste
disturbance of existing sites
increase in production
-potential groundwater impact
-visual (aesthetic) impact/pollution

c. Health
-impact on air quality from additional traffic
-impact on air quality from additional industry
-impact on groundwater resources
-contamination risk

d. Community
-definition of relevant community
-displacement of some residents
-change in neighborhood
-increased commercialization
-impact on property values
-impact on historic resources
-impact on municipal resources

e. Environmental Justice
-do the costs outlined in a-d fall disproportionately upon the poorer members of the community?

The above are suggestions to facilitate analysis; additional areas of potential impact may be identified by students during their research.

3.2 Research on Specific Costs and Benefits by Area

-to be conducted by teams during Fall 2000
-initial research on potential impacts due October 19th, 2000

4. Recommendations Aimed at Maximizing Benefits while Minimizing Costs

-to be completed by November 17th, 2000

5. Develop Plan to Disseminate Information

-to be completed by November 17th, 2000

6. Incorporate Research and Recommendations into a Written Proposal and PowerPoint Presentation

-to be completed by December 1st, 2000 and then reviewed and revised

7. Presentation/Proposal for Trashbusters and BRBC

-date to be set subject to approval by Trashbusters and BRBC

Appendix A: Introduction to Service Learning

In order to re-emphasize the mission of the school and engage the students in helping the local community, Sacred Heart University introduced Service Learning into the curriculum in 1994, primarily in the areas of social sciences and communication. Service Learning has offered students the opportunity to learn about an academic subject through active participation in service experiences that are integrated into the curriculum. The service meets community needs and is directly linked to the content of the course. For example, students taking Conversational Spanish tutor children in bilingual classes or work in an elderly day care program for Spanish speaking senior citizens. A Service Learning writing course focusing on urban education involves students in inner city classrooms, while they study and discuss public policy issues related to education. Service Learning students in a research writing course exploring immigration issues visit weekly with elderly Russian Jews or help newly arrived immigrants learn English. In a religion course, Contemporary Moral Issues, Service Learning students work in soup kitchens, inner city tutoring programs, mental health centers, Habitat for Humanity, and women·s literacy programs.

A Service Learning course includes discussion, reflection and analysis of the service experience. It may also include student involvement in planning the project, contacting community members and grant writing when funding is needed. Service Learning may be required of all students in a course, or be an option in place of a more conventional research assignment. One of the aims of Service Learning is to turn passive learners into active learners, as students grapple with real life issues related to their course work. While providing meaningful service to the local community, the students also learn about citizenship and social responsibility.

Most Sacred Heart Service Learning programs occur in nearby Bridgeport, CT., a former industrial and manufacturing center with a very ethnically and racially diverse population. Since many of the businesses have moved out, unemployment is high and about one third of Bridgeport residents live in poverty. Many neighborhoods have been under great stress with serious crime problems, absentee landlords, and a transient population. Because of financial difficulties, the city has had to cut many important services, especially relating to the environment and many forms of pollution have added to the degradation of neighborhoods. Some groups in the city have looked to Sacred Heart to form partnerships to improve their neighborhoods.

In the past two years these requests have been the basis of Service Learning environmental projects in biology and economics courses. In the spring of 1998, a Freshman Honors class in environmental science, collaborated with 7th grade children from an inner-city elementary school, the local police, and community groups on the ecological restoration of an undeveloped woodland. The second Service Learning project was offered as an option in the Principles of Microeconomics course. In the spring of 1999, students selecting the service learning option conducted a feasibility study for Groundwork Bridgeport, a program which helps local community groups restore parks, reclaim vacant lots for green space or community gardens, build playgrounds, or do other physical improvements in the city. Most recently, students in the microeconomics course have assisted with a number of projects related to economic development including: an analysis of the available space in downtown area for the Bridgeport Regional Business Council (BRBC), an analysis of existing restaurants in the downtown area for the BRBC, the development of a marketing plan to enhance the downtown area for the BRBC, planning and executing fundraising for Habitat for Humanity, analysis of the Jobs Expo with recommendations for future improvement, and planning the execution and marketing for the renovation of a historic home in Stratford.

It is our hope that the proposed interdisciplinary analysis of the Seaview Avenue Corridor will provide another fruitful service learning experience.

Appendix B: attachments of information on Seaview Avenue Corridor

More information to come

School: Sacred Heart University
Professor: Dr. Bridget Lyons
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