Skip to main content

Economic Analysis

Go Search
New Atlas
Atlas, A-Z
Atlas Maps
MPP/MPA Programs
Core Topics
Illustrative Courses
Topic Encyclopedia
Concept Dictionary
Career Tips
Best Practices Project


A Public Policy and Management Subject in the Tools and Skills Domain

Economic Analysis

This public mangement subject, under the Tools and Skills domain, covers the principles and techniques of micro economic theory that are most useful in analyzing economic aspects of public policy. It includes economic incentives and organizations; models of economic behavior; the operation of markets; the price system and how it works; the consequences of market failure and interventions in markets; and policy objectives and instruments. It illustrates how to apply economics to policy issues such as taxation, subsidy programs, education and health policy, and labor markets.


 Courses dealing with Economic Analysis of Public Policy

  Toronto PPG 1002 - Microeconomics for Policy Analysis
  Carleton PADM 5111 - Microeconomics for Policy Analysis
  HKS API-101 - Markets and Market Failure
  Johnson-Shoyama PUBP/GSPP 805 - Economics for Public Policy Analysis (Fulton, Zhang)
  Simon Fraser MPP 801 - Economic Foundations of Policy Analysis I
  Ottawa API 5136 - Research Methods for Public Policy

In the coming months, teaching topic pages will be created for most of the following topics derived from the two HKS courses, API-101: Markets and Market Failure and API-101: Markets and Market Failure.

The basics of supply and demand. Market equilibrium

Determinants of supply and demand. Elasticities

Supply and demand in action

Policy application: Minimum wages and rent control

Indifference curves; budget lines; optimality conditions

The law of demand; income and substitution effects; market demand

Policy applications: Vouchers versus subsidies

Policy applications: Taxes, lump sum transfers, kinked budget lines, intertemporal choice

Production theory

Profit maximization and competitive supply

Perfect competition and efficiency; consumer surplus and producer surplus


Price supports, production quotas

Taxes, subsidies, price controls revisited


Price discrimination and regulation

Oligopoly; Cournot model

Prisoner's dilemma; basics of game theory

Asymmetric information: lemons and signaling


Applications of externalities; pollution control

Public goods and commons problems

Page created by: Ian Clark, last updated 22 February 2013.

 Topics, References and Concepts primarily associated with Economic Analysis of Public Policy

  Topics with References primarily associated with Economic Analysis of Public Policy
  Concepts primarily associated with Economic Analysis of Public Policy

 Topic sites associated with Economic Analysis of Public Policy

  Consumer Theory
  Game Theory and Strategic Interaction
  Incentive Effects of Welfare Policy and the Design of Transfer Systems
  Market Failure and Optimal Intervention
  Theory of the Firm

Important Notices
© University of Toronto 2008
School of Public Policy and Governance