Principles of Policy Analysis: Final Exam

In case you were wondering what it is that a policy analyst is supposed to know or know how to do, here’s the final exam from my introductory course at NYU. I’m pleased to say that most of a mixed class of graduate students (from several disciplines) and undergraduates aced it.

Identify briefly (5 points each):

1. Latent group
2. Agile trial
3. Hawthorne effect
4. Agency losses
6. Rational apathy
7. Collective efficacy
8. Strategic triangle

Answer in a sentence or two, or at most a short paragraph (10 points each)

1. How does the Prisoner’s Dilemma engage the idea of dominance? List five things that could get both parties to choose the cooperative option.

2. How does information asymmetry create the adverse selection problem in insurance markets?

3. What is the difference between a universal program and a means-tested program? How does a means test resemble an income tax?

4. How can income inequality create inefficiency? How can policy to make incomes more equal create inefficiency?

5. How does the use of a Randomized Controlled Trial prevent the distortion of results by sample selection bias?

6. Trace the line of reasoning that connects the capacity to budget rationally (i.e., prioritize among needs) to the case for public policies to make the distribution of income more equal.

7. In a world of uncertainty, everyone takes actions that, in retrospect, lead to regret. How is anticipated regret different?

8. What are the two meanings of “social capital”? How can the structure of individual social capital help create and support collective social capital?

9. H = h x u

Explain the meaning of this equation, and it to analyze the choice between encouraging and discouraging non-combustion forms of nicotine use.

10. How do deficits in collective efficacy both create needs for public intervention and make successful public intervention less likely?

Quasi-numerical problem

As town manager of a town with 10,000 residents, you have a choice between two programs; you must do one or the other, and cannot do both. Neither has any budget cost.

Program A has a 50% chance of preventing the sudden deaths 10 random residents. (The other 50% of the time it has no effect.) The avoided deaths would occur an average of five years from now.

Program B has benefits worth $10M per year for seven years, starting a year from now.
Describe the calculation you would need to do to choose between the programs, including specifying any data not specified you would need in order to work out the answer.

EXTRA CREDIT: Someone offers a test to predict whether Program A will deliver benefits or not. Describe the calculation you would need to do in order to decide whether to have the test done or not.