Applied Economics of Consumption

Course content

In this course we consider the various aspects of empirical economic analysis from data generation to interpreting and using the results. An important objective of the course is to train the students in techniques for carrying out independent empirical economic analysis and interpreting and using the outcome of such analysis to answer real life problems. The outset of the course is microeconomic theory to explain consumption behavior and market potentials, but we consider many more aspects of the applied economics than the basic theory.

Topics that we will consider include the suitability of different types of data (e.g. surveys , focus groups, register data) to answer different research questions, advantages and disadvantages of choosing different model types and functional forms. Furthermore we will focus on how to use the outcome of empirical analysis e.g. derivation of economic welfare measures, willingness-to-pay (WTP) measures, market prospects, calculation of consumer surplus, revenue generation, private and social costs. We will also consider aspects as regulation of consumer behavior via taxation and information provision etc. to exemplify how the outcome from our economic models can be used to simulate and generate answers to real life problems. Each of the  above mentioned issues will be derived from microeconomic theory and as such the course will consider empirical work from idea to finished product.

Based on state-of-the-art literature on these aspects, we will work on 2 food-related cases aiming to develop, interpret and use empirical model types relevant for different aspects of business or policy analysis during the course. The two cases are aimed at giving the students hand-on experience of how to work in the field of applied economics. The specific topics to be analysed will be decided at the beginning of the course,if possible based on the interests of the students. Examples may include:

  • Economic consequences of alternative schemes for taxation or subsidization of food consumption – for consumers, suppliers and the public sector.
  • Market potentials for food products with specific attributes
  • Impacts of information on food consumption behavior and its implications for economic welfare.


The course will be relevant for you who will be employed to perform or understand empirical economic analyses, whether you will work in a Ministry, an NGO or for a private company, and useful for you that intend to carry out empirical work for your thesis.


MSc Programme in Agricultural Economics
MSc Programme in Environmental and Natural Resource Economics

Learning outcome

Upon completing this course, the students should be able to

To know the strengths and weakness of different data types for empirical analysis

To know and be able to derive the different functional forms used in empirical consumer economics and the advantages and disadvantages of different model types

To generate and interpret post estimation measures as WTP, consumer surplus, producer surplus,


Implement economic consumption theory in empirical models, analyse these models, and interpret the empirical properties of these models, including

  • select appropriate functional forms
  • assess the suitability of empirical data for the analysis
  • undertake empirical (e.g. econometric) analysis of consumption data
  • interpret results of empirical analysis
  • calculate relevant derived measures, e.g. economic welfare loss,  equivalent/compensating variation, willingness-to-pay/​willingness-to-accept, tax revenue, etc.



  • Conduct empirical economic analysis of consumer behaviour
  • make a short and structured presentation of own empirical work
  • engage in group discussions in English

critically and constructively reflect on the empirical work of other scholars (fellow students as well as published work)

The course will combine lectures on relevant microeconomic theories and appropriate methodologies (e.g. functional forms, statistical approaches, economic welfare measures, etc.), applied empirical work on specific topics, and lectures and discussions based on the findings and experiences obtained from the empirical work. During the course, two cases will be analysed empirically. Students are requested to prepare a report on each of these case analyses, upon which an oral exam will be based. One of these case reports may be prepared in groups (maximum 3 members per group)

Selected scientific journal articles and textbook sections

Students should have a reasonable understanding of mathematics, and statistical analysis. As we will take outset in the basis microeconomic models the students need an understanding of microeconomics and/or public economics corresponding to bachelor degree in economics (or similar topic), to benefit from this course.

Continuous feedback during the course of the semester
7,5 ECTS
Type of assessment
Oral examination, 20 - 30 minutes
Oral examination, based on group project and on the general curriculum.

No time for preparation.
All aids allowed
Marking scale
7-point grading scale
Censorship form
No external censorship
Two internal examiners
Criteria for exam assessment

The assessment is based on the criteria given by the Learning Outcomes

Single subject courses (day)

  • Category
  • Hours
  • Lectures
  • 36
  • Preparation
  • 54
  • Project work
  • 60
  • Practical exercises
  • 20
  • Exam Preparation
  • 35
  • Exam
  • 1
  • English
  • 206