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PUBH735 The Economics of Health Policy Decision Making

2021 information for papers will be published in early September. 

Principles of economic decision making in health including microeconomic foundations, demand and supply analysis, taxation, subsidies and policy options of health care, market failures and evaluation of health systems performance.

In this paper, students will be introduced to the concepts and principles underpinning the market for health care and learn about the policy tools available for regulating the market and incentivising behaviour. Concepts such as competition, economics of scale, marginal and opportunity cost, efficiency and equity will be covered. The reasons why the health care market can fail, including monopolies, problems with health insurance, adverse selection, moral hazard, information asymmetry and externalities will be discussed.

Using real world examples, students will gain an understanding of the advantages and disadvantages of various policy options, including payment incentives/disincentives, co-payments, capitation, taxation, subsidies and regulation. The paper will conclude with an overview of different health systems and their comparative performance.

Paper title The Economics of Health Policy Decision Making
Paper code PUBH735
Subject Public Health
EFTS 0.1250
Points 15 points 15 points
Teaching period(s) 1st Non standard period (24 February 2020 - 9 April 2020), 1st Non standard period (24 February 2020 - 9 April 2020)
Domestic Tuition Fees (NZD) $1,428.75
International Tuition Fees (NZD) $5,181.50

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PUBH 704
Limited to
MA, MHealSc, MPH, MSc, DPH, PGDipArts, PGDipHealMgt, PGDipHealSc, PGDipPHC, PGCertPH, PGCertPHC
(i) PGCertPHC and PGDipPHC students require approval from the Board of Studies in Primary Health Care to enrol for this paper. (ii) This paper runs for the first half of first semester.
Students who have completed an undergraduate degree in any discipline or recognised equivalent.

Wellington Campus:
Christchurch Campus:
Dunedin Campus:

Teaching staff

Wellington Campus: William Leung, Dr Brian Easton
Christchurch Campus: TBC
Dunedin Campus: Dr Trudy Sullivan (Overall Convenor)

Paper Structure


  1. Introduction to health economics, cost analysis, and demand and supply analysis.
  2. The demand for health care and analysis of policy options.
  3. Health care markets and market failure.
  4. Regulating the supply of medical care.
  5. Health care supply, payment mechanisms and policy options.
  6. Health care systems and comparative performance.


  • Assignment: 40%
  • Exam: 60%
Teaching Arrangements

Friday mornings, 9:00 am - 12:00 pm

Text to be confirmed. Please contact the Department.
Graduate Attributes Emphasised
Global perspective, Interdisciplinary perspective, Lifelong learning, Scholarship, Communication, Critical thinking, Information literacy, Research, Self-motivation.
View more information about Otago's graduate attributes.
Learning Outcomes

Students who successfully complete the paper will:

  • Demonstrate and apply understanding of basic microeconomic principles and concepts to selected issues in health care decision making.
  • Apply economic analysis to selected issues in health care markets and to options for government policy and regulation.
  • Demonstrate and apply understanding of the economic context in which health services function, with particular reference to publicly-funded health services in New Zealand.
  • Demonstrate and apply economic analysis of selected types of health care markets, economic incentives/disincentives, payment options and different systems of financing health care services.

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1st Non standard period (24 February 2020 - 9 April 2020)

Teaching method
This paper is taught On Campus
Learning management system


Stream Days Times Weeks
A1 Friday 09:00-11:50 9-12

1st Non standard period (24 February 2020 - 9 April 2020)

Teaching method
This paper is taught On Campus
Learning management system