HECON4230 – Optimal regulation

Schedule, syllabus and examination date

Choose semester

Course content

Health economists are frequently asked to give advice on government policy. What is the optimal tax on alcohol and tobacco? Should the price of pharmaceuticals be regulated and if so how?  This course will presents the theory behind market failure, an overview of the types of interventions governments have available to correct the failures, and the problems associated with these interventions (government failure). The presentation will be based on two case studies: Interventions to prevent consumption of unhealthy goods (alcohol, cigarettes, sugar) and interventions to regulate the market for pharmaceuticals.

Learning outcome


You will learn:

  • Reasons for market failure.
  • Pareto optimality and the first theorem of welfare economics.
  • Reasons for government failure.
  • Lipsey’s theory of the second best.
  • Theory of rational addiction.
  • Reference pricing systems, value based pricing, step based pricing.


You will learn how to:

  • Be able to conduct a cost of illness study and know its limitations.
  • Be able to calculate the optimal tax on alcohol and tobacco.

General competence

You will attain:

  • Increased ability to critically evaluate controversial claims in a politically charged policy area.
  • Better competence in distinguishing normative and positive claims, and to see how they are intertwined.


Students who are admitted to study programmes at UiO must each semester register which courses and exams they wish to sign up for in Studentweb.

If you are not already enrolled as a student at UiO, please see our information about admission requirements and procedures.

Overlapping courses

2 credits overlap with HME4308 – Health economics and market failures (discontinued)


Access to teaching

A student who has completed compulsory instruction and coursework and has had these approved, is not entitled to repeat that instruction and coursework. A student who has been admitted to a course, but who has not completed compulsory instruction and coursework or had these approved, is entitled to repeat that instruction and coursework, depending on available capacity.


Written exam.


The Board at the University of Oslo has decided to introduce detailed guidelines for all examinations, which take place at the University. The description of the grading should be clear and transparent. This is done to ensure alignment between learning outcomes, assignments, and grading. The Faculty of Medicine has developed a web page with information regarding exams and the grading procedures (norwegian version

Digital examination

The written examination is conducted in the digital examination system Inspera. You will need to familiarize yourself with the digital examination arrangements in Inspera.

Read more about written examinations using Inspera.

Language of examination

For students at Eu-HEM: English

For students at HEPAM: The problem set will be given in English. Answers can be given in Norwegian, Swedish, Danish or in English.

Grading scale

Grades are awarded on a scale from A to F, where A is the best grade and F is a fail. Read more about the grading system.

Explanations and appeals

Resit an examination

For HEPMA students:

For Eu-HEM students:

An EU-hem student cannot present her or himself for the examination in a course more than two times. There will be held re-sits for EU-hem students who have failed an exam or who have legitimate absence (usually illness) in January and August. If you are entitled to a re-sit you must contact the student advisor via email no longer than one week after the result of the exam has been published.

Withdrawal from an examination

It is possible to take the exam up to 3 times. If you withdraw from the exam after the deadline or during the exam, this will be counted as an examination attempt.

Special examination arrangements

Application form, deadline and requirements for special examination arrangements.


The course is subject to continuous evaluation. At regular intervals we also ask students to participate in a more comprehensive evaluation.

Facts about this course






Every spring

The course will not be offered spring 2021.


Every spring

Teaching language