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Microeconomic Theory and Public Policy

Understand microeconomic research at every level, from theory to empirical testing. Then, apply this understanding to the public policies that affect the US and other similar industrialized nations.

Microeconomic Theory and Public Policy

Understand microeconomic research at every level, from theory to empirical testing. Then, apply this understanding to the public policies that affect the US and other similar industrialized nations.

The course is free to audit. Learners can take a proctored exam and earn a course certificate by paying a fee, which varies by ability to pay. Please scroll down for more information on the verified and audit track features and see FAQ articles for more information on the pricing structure. Enroll now in this course by selecting the "enroll now" button at the top of the page.

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This course is an ADVANCED elective course under the Public Policy Track of the MITx MicroMasters program in Data, Economics, and Design of Policy (DEDP), which provides a path toward the Master’s in DEDP at MIT. Five total courses (3 core, 2 electives) are needed to complete the Public Policy MicroMasters Program Credential in DEDP. For more information on DEDP MicroMasters program requirements, please visit our FAQ page.

Microeconomic Theory and Public Policy is an advanced course in microeconomic theory that draws primarily on examples derived from the US and other advanced economies. Specifically, this course applies microeconomic theory to analysis of public policy. It builds from the microeconomic model of consumer behavior and extends to the operation of single and multiple markets and analysis of why markets sometimes fail. We will study empirical examples to evaluate theory, focusing on the causal effects of policy interventions on economic outcomes. Topics include minimum wages and employment, food stamps and consumer welfare, economics of risk and safety regulation, the value of education, and gains from international trade.

Unlike traditional introductory economics courses, which only provide cursory evidence related to the theories discussed, this course aims to form questions, frame them analytically, figure out ways to test them with data, and then draw conclusions. We will spend a lot of time in this course reading recent papers from leading economics journals and interrogating them. What is the research design? What do they conclude, and what are the limitations?

The class is organized around three themes:

  1. Economic theory: Where does it come from, what does it predict, and in what ways is it useful?
  2. Causality: What is it, and how do we measure or estimate causal effects? How do we actually test these theoretical models? Are they correct, incorrect, or somewhere in-between?
  3. Empirical applications: Economic theory is a way of organizing facts and interpreting and patterns in the world. This class will use data to test theory and use theory to interpret data. We will analyze a number of randomized experiments and quasi-experiments in the light of economic theory.

Course Preview

Our course previews are meant to give prospective learners the opportunity to get a taste of the content and exercises that will be covered in each course. If you are new to these subjects, or eager to refresh your memory, each course preview also includes some available resources. These resources may also be useful to refer to over the course of the semester.

A score of 60% or above in the course previews indicates that you are ready to take the course, while a score below 60% indicates that you should further review the concepts covered before beginning the course.

Please use this link to access the syllabus and this link to access the course preview. Once you have completed this preview, use the answer key to check your answers.

Comparing the Audit and Certificate Tracks

Image is of a table explaining the different features of the verified and audit track. For an text table please use the link below.

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What you'll learn

  • A range of microeconomic theories along with the empirical strategies that have been used to test them
  • How to understand and interpret the methodologies and key findings of current microeconomic research
  • How to apply microeconomic theory to real-world policy problems facing the US and other advanced economies


Basic understanding of calculus and familiarity with microeconomics will be helpful for this course. There are no prerequisites, but you may find it helpful to take 14.100x (Microeconomics) before this course.

Meet your instructors

  • Featured image for David Autor
    Ford Professor of Economics

Who can take this course?

Because of U.S. Office of Foreign Assets Control (OFAC) restrictions and other U.S. federal regulations, learners residing in one or more of the following countries or regions will not be able to register for this course: Iran, Cuba, Syria, North Korea and the Crimea, Donetsk People's Republic and Luhansk People's Republic regions of Ukraine.