Economics & Statistics Requirement

All students enrolling for the Master of Urban Planning are required to have a basic fundamental knowledge of microeconomics and inferential statistics upon entry in the program. At present, this requirement is enforced by the level of economics and statistics competence adopted as pre-requisites in the MUP core. Students with academic backgrounds deficient in economics and/or statistics should address the deficiency by individual study or completing appropriate courses at another university, college or community college prior to fall enrollment. As a last resort, students not addressing the deficiency prior to matriculation at UIUC should take the necessary course or courses in the first semester of their coursework at the University of Illinois.

The required level of economics and statistics competence is described below. Please contact Professor Stacy Harwood, MUP Coordinator, if you have further questions about economics and statistics requirement.

Economics Requirement

Several of the courses in the MUP core curriculum, as well as electives in areas as transportation, housing, land use, real estate finance, urban financial management, and economic development assume a working knowledge of microeconomic principles at the intermediate level. The Department therefore requires students entering the MUP to have taken and passed an intermediate microeconomic principles course prior to matriculation or to successfully complete such a course in the first semester of the program.

Students should be familiar with the following topics:

• The economy as a system;
• Production decisions (production functions, returns to scale, factor substitution);
• Supply and costs (opportunity costs, fixed and variable costs);
• Elements of choice (tastes and preferences, static and inter-temporal choice);
• Demand by households and individuals (utility functions and elasticities of demand);
• Market processes (aggregate supply and demand, adjustment dynamics, and market intervention);
• Markets for factors of demand (land, labor, and capital markets);
• Evaluating economic performance (efficiency, equity);
• The concept of market failure;
• Imperfect competition (barriers to entry, monopoly production, regulation and deregulation, monopsony, oligopoly);
• Externalities (private solutions and public interventions);
• Public goods (features of and optimal public goods production);
• The public sector (major functions, expenditures, and revenues);
• Public pricing (publicly priced goods, role of prices, evaluation criteria, pricing options);
• Public investment decisions (discounting, costs, and benefits).

Students should also have a basic understanding of such macroeconomic phenomena as inflation, unemployment, and business cycles.

The Department does not offer a course that covers this material. Options available to entering students who have not taken such a course in their undergraduate programs include taking a course at a college, university or community college of their choice the summer before they enter the program, enrolling in a course at UIUC in their first semester (ECON 302 is recommended), taking an online course offered at UIUC or elsewhere, or engaging in self-study. Note that self-study is only recommended for students who have had some formal training of economics but perhaps not complete coverage of the topics above.

Even students who have done well in an intermediate microeconomic principles course in the past may no longer be comfortably conversant with the material. To reacquaint themselves with the material such students should consult one or more of the following texts: Apgar and Brown's Microeconomics and Public Policy; Steinman, Apgar, and Brown's Microeconomics for Public Decisions, or Levy's Essential Microeconomics for Public Policy Analysis. Such texts are used pervasively in public economics, public administration, and planning programs in the U.S. A more traditional intermediate microeconomics text with good coverage of public policy issues and methods is Walter Nicholson's Intermediate Microeconomics and its Application.

Statistics Requirement

While comparatively few professional planners work directly with inferential statistics in their own practices, they rely heavily on statistical information and research findings to understand planning problems, evaluate options, and make decisions. All MUP students must therefore be capable of properly interpreting statistical research, including pitfalls and limitations in its use. Moreover, certain areas of practice, transportation, finance and economic develompent among them, do often make direct use of statistical concepts, tools and principles. For planning PhD students, inferential statistics is one of a number of essential tools for conducting research.

Students should have a basic knowledge of the following topics:

1. Understanding Data
1. Gathering data and sampling
2. How to ask questions and conduct surveys
3. Types of data and measurement (qualitative, cardinal, ordinal)
4. Measures of dispersion (variance, covariance, standard, deviation, quartile deviation)

2. Turning Data into Information
1. Relationship between quantitative variables
2. Relationship between categorical variables
3. Probability and random variables
4. Significance tests
5. Regression analysis

3. Turning Information into Knowledge
1. Understanding the role of statistics in making decisions
2. Forecasting with a regression model
3. Presenting statistical analyses in reports

Those students who have not taken any prior statistics courses or have not acquired knowledge on topics listed above should either take courses similar to UIUC's UP 116, SOC 185 or ECON 172 or undertake self-study during the summer before enrolling at DURP. The following are recommended texts:

• Mind on Statistics, 3rd Edition, by Jessica Utts and Robert Heckard (Duxbury, 2003)
• Statistics for the Social Sciences, 3rd Edition, by Mark Sirkin (Sage, 2005)
• Statistics for Social Data Analysis, 4th Edition, By George Bhornstedt, David Knoke, and Alisa Mee (Wadsworth, 2002)