Course Syllabus The Economics of Vice: Sex, Drugs and Rock 'n Roll

Course Syllabus
The Economics of Vice: Sex, Drugs and Rock ‘n Roll
Course Description
Drawing mainly from recent empirical studies in applied microeconomics, this course
will expose students to issues both economic and social surrounding three areas of
perennial interest: sex, drugs and music. As an exposé into current economic research,
the course will provide insights into different econometric approaches to answering
questions of interest in the three areas, as well as some basic theoretical contributions that
guide the literature. Regarding social relevancy, the course will cover topics along the
way including the effects of cigarette taxes on health outcomes, the whether policing and
violence help illegal drug markets flourish, whether treating HIV slows infection rates,
and the impact of file-sharing on the music industry.
Course Structure:
Most class sessions will consist of lectures and discussions of the models and estimation
techniques contained within the assigned readings for each class period. This may
include a lecture on a simplified version of the paper, which captures the basic features
but reduces the technical burden. Pursuant to and prior to lectures, class discussions will
allow students a chance to offer comments as well as economic or econometric criticisms
of the topic of study (please refrain from discussing personal prior vice-related activity in
class). In addition to the standard lecture format, the course will also include a written
research project, portions of which will be due at set dates during the semester, and a
final copy of which will be due at the end of the course. The research paper will be on a
proposed or enacted policy of the students’ choosing related to the topics discussed in
class.
Grading
A midterm and final exam will be administered and exam questions will be drawn from
the lectures and since participation in this type of course is essential for dialog,
participation in discussions is mandatory and a short (two question) quiz on the main
points of the readings will be given occasionally(6-7 quizzes in the semester). The grade
weighting will be as follows:
Written Project 30%
Discussion Participation 10%
Quizzes 10%
Midterm 25%
Final 25%
Prerequisites
In general the course will be econometric in nature. All students should have completed
at least ECON 139 and ECON105, mastered that material, and be comfortable learning
slightly more complicated econometric techniques.
Quizzes and Participation:

Roughly twelve short (less that 10 minute) quizzes will be administered throughout the
semester. The quizzes will ask questions regarding the assigned reading and serve to
ensure active fulfillment of the reading requirements. The lowest two quiz scores will be
dropped. The participation score is designed to encourage in-class discussion of the
economic and social issues studied in the papers.
Exams:
The exams will be based on lectures and the reading material. Mathematical questions
will mainly be drawn from the less complicated lectures. However the papers must be
read, and topics and ideas not covered in class will be tested. Since many of the same
estimation techniques will be used, the exams are in this sense cumulative
Written Project
Within the first two weeks of class each student will discuss with me via email or in
person the policy they are interested in studying. The first two sections of the written
project will be the same for all students; the third section can be one of two options. The
first section is to be a compilation and summary of non-economic research and
information surrounding the policy of interest. The research should draw from related
fields, e.g. medicine, public health, industry reports, legal and/or business history,
sociology, and any other relevant field as well as popular media. The goal of this first
section is to give a broad understanding of where this policy fits in history and society.
The second section will be a very detailed analysis of economic research on this and
closely related policies. This section will give in-depth reviews on the econometric and
theoretical work on these policies; it should include some technical details which
demonstrate the student understands what insights economic analysis adds to our overall
knowledge of the policy and its consequences, both intended and unintended. Finally the
last section will either take the form of a presentation or another written section. The
presentation will be via power point and be aimed at a non-economic audience, the goal
being to help students develop their ability to communicate economic research. The other
option for the third section is for the student to engage in original research on their topic
of interest, which will require gathering data, coming up with an empirical strategy for
understanding the policy effects, and carrying out the analysis.
Procedures
Each of the written sections should be around 10 pages (standard fonts and margins), and
the presentation should be around 30-35 minutes. After written sections are turned in I
will give feedback on what should be changed/improved, and the final copy, due the last
day before the final exam, should address the changes.
Due Dates(tentative)
1 st Section Thursday Feb 12
2 nd Section Thursday Mar 26
Some Suggested Policies for Projects:
Cigarette Sales Taxes
Smoking Bans
Drug legalization
Alcohol regulation

Sex Education/condom distribution
Effects of abortion legalization on social outcomes
Altering copyright laws
Digital media innovations’ effect on music industry
Suggested Textbooks(not required):
A Guide to Econometrics, 5 th Edition. Peter Kennedy, ISBN: 0-262-61183
-This book is a very good and intuitive guide through econometrics with detailed
references. I will suggest readings from this book to review or introduce the
econometric concepts we will cover in class. Purchasing this book is a great
substitute for trying to remember all of econometrics.
Reading List by Section
Rational Addiction and Smoking
(3 weeks)
Readings:
I. Overview
Tobacco at the Crossroads: The Past and Future of Smoking Regulation in the
United States
Gruber,-Jonathan
Journal-of-Economic-Perspectives. Spring 2001; 15(2): 193-212
http://www.jstor.org/view/08953309/di021425/02p0030f/0#&origin=sfx%3Asfx
Policy Watch: Alcohol and Cigarette Taxes
M Grossman, JL Sindelar, J Mullahy, R Anderson
The Journal of Economic Perspectives, 1993 Vol. 7, No. 4. (Autumn, 1993), pp.
211-222.
Stable URL: http://links.jstor.org/sici?sici=0895-
3309%28199323%297%3A4%3C211%3APWAACT%3E2.0.CO%3B2-V
II. Testing Competing Models
An Empirical Analysis of Cigarette Addiction
Becker,-Gary-S; Grossman,-Michael; Murphy,-Kevin-M
American-Economic-Review. June 1994; 84(3): 396-418
Cigarette smoking and self-control
Kamhon Kan
Journal of Health Economics
Volume 26, Issue 1, January 2007, Pages 61-81
Are Smokers Misinformed?
Ahmed Khwaja, Dan Silverman, and Frank Sloan
Mimeo 2007
The compensating behavior of smokers: taxes, tar and nicotine
Evans, Willian, Farrelly Matthew
RAND Journal of Economics

Taxes, Cigarette Consumption and Smoking Intensity
Adda, Jeroma, Cornaglia, Francesca
AER 2006
Illicit Drugs
(4 Weeks)
Readings:
I. Drug Demand
Adolescent Alcohol and Marijuana Consumption: Is There Really a Gateway
Effect?
Rosalie Liccardo Pacula
NBER Working Paper No. 6348
Issued in January 1998
https://wwww.nber.org/papers/w6348
Alcohol and marijuana use among college students: economic complements or
substitutes?
J Williams, R Liccardo Pacula, FJ Chaloupka, H … - Health Economics, 2004 -
doi.wiley.com
http://www3.interscience.wiley.com/cgi-bin/fulltext/107061902/PDFSTART
The Demand for Illicit Drugs
Saffer,-Henry; Chaloupka,-Frank
National Bureau of Economic Research, Inc, NBER Working Papers: 5238 1995
http://www.nber.org/papers/w5238.pdf?new_window=1
Alcohol, Marijuana, and American Youth: The Unintended Consequences of
Government Regulation
DiNardo,-John; Lemieux,-Thomas
Journal-of-Health-Economics. November 2001; 20(6): 991-1010 A
http://www.sciencedirect.com/science?_ob=MImg&_imagekey=B6V8K-447N1RD-6-
42&_cdi=5873&_user=38557&_orig=search&_coverDate=11%2F30%2F2001&_qd=1&_sk=999799993&view=c&wchp
=dGLbVlz-zSkzk&md5=d7d02450785a60d8113d1c6e420f8a10&ie=/sdarticle.pdf
Read Ch 2. Ken Train, Discrete Choice Methods
http://elsa.berkeley.edu/choice2/ch2.pdf
Sex
(4 Weeks)
Readings:
I. Pregnancy and Abortion
Did Legalized Abortion Lower Crime?
Ted Joyce
The Journal of Human Resources, Vol. 39, No. 1. (Winter, 2004), pp. 1-28.

Further Evidence that Legalized Abortion Lowered Crime: A Reply to Joyce
John J. Donohue III; Steven D. Levitt
Journal of Human Resources , (May, 2004)
Further Tests of Abortion and Crime
Joyce, Ted
NBER Working Paper 10564
Adolescent Premarital Childbearing: Do Economic Incentives Matter?
Shelly Lundberg; Robert D. Plotnick
Journal of Labor Economics > Vol. 13, No. 2 (Apr., 1995), pp. 177-200
Should I stay or Should I Go? Abortion Demand and Relationship Dissolution.
Andrew Beauchamp (2007), working paper.
II. Reasons for Risky Sex Behavior
Competing for the Opposite Sex: An Equilibrium Model of High School Dating
and Sex Behavior
Arcidiacono-Peter, Beauchamp-Andrew, McElroy-Marjorie
Working paper 2006.
Habit Persistence and Teen Sex: Could Increased Access to Contraception have
Unintended Consequences for Teen Pregnancies?
Arcidiacono-Peter, Khwaja -Ahmed and Ouyang -Lijing
Duke University, Working paper
http://www.econ.duke.edu/~psarcidi/addicted13.pdf
III. Problems in HIV Prevention
When Knowledge Is Not Enough: HIV/AIDS Information and Risky Behavior in
Botswana
Levinsohn,-James-A; Dinkelman,-Taryn
National Bureau of Economic Research, Inc, NBER Working Papers: 12418 2006
http://www.nber.org/papers/w12418.pdf
HIV Breakthroughs and Risky Sexual Behavior
Lakdawalla,-Darius; Sood,-Neeraj; Goldman,-Dana
Quarterly-Journal-of-Economics. August 2006; 121(3): 1063-1102
http://www.mitpressjournals.org/doi/pdfplus/10.1162/qjec.121.3.1063
Rock ‘n Roll
(3 Weeks)
Readings:
I. Overview
Rockonomics: The Economics of Popular Music
Connolly,-Marie; Krueger,-Alan-B
National Bureau of Economic Research, Inc, NBER Working Papers: 11282 2005

II. File Sharing and Music Demand
Piracy and the Legitimate Demand for Recorded Music(tentative)
Hui,-Kai-Lung; Png,-Ivan
Contributions-to-Economic-Analysis-and-Policy. 2003; 2(1):
http://proquest.umi.com/pqdlink?Ver=1&Exp=12-14-
2011&FMT=7&DID=686503971&RQT=309&clientId=15020&cfc=1
The Effect of File Sharing on Record Sales: An Empirical Analysis
Koleman Strumpf and F. Oberholzer
Working paper, 2005
http://www.unc.edu/~cigar/papers/FileSharing_June2005_final.pdf
Piracy on the High C's: Music Downloading, Sales Displacement, and Social
Welfare in a Sample of College Students
Rob,-Rafael; Waldfogel,-Joel
National Bureau of Economic Research, Inc, NBER Working Papers: 10874 2004
http://papers.nber.org/papers/w10874.pdf?new_window=1
III. Models of Music Industry and Piracy
Peer-to-Peer File Sharing: The Case of the Music Recording Industry (tentative)
Alexander,-Peter-J
Review-of-Industrial-Organization. March 2002; 20(2): 151-61
http://proquest.umi.com/pqdlink?Ver=1&Exp=12-14-2011&FMT=7&DID=417551651&RQT=309&clientId=15020