Governments engage in two types of activities. They provide goods and services and they engage in economic development projects that create jobs and a tax base for their communities. The course covered the mains tools for analyzing these two types of government activities.
The tool for determining whether the government should deliver a particular good or service is cost/benefit analysis. This is a method for placing a monetary value on goods such as museums, reduced pollution or saving endangered specie, which are typically not traded in the private market and therefore have no market price that can be used to measure their benefits. Cost/benefit analysis also shows how to sum streams of costs and benefits that accrue over different time periods and how to evaluate projects that will yield uncertain benefits, such as a dam that would be useless unless there is a storm. Cost/benefit analysis translates the consequences of a project to all members of society. The tools for assessing the value of an economic development project are location quotients, shift-share and input/output analysis. All methods require statistical analysis of data. The course covered the use and analysis of both government and opinion survey data.