The general theory of magneto‐optical effects is reviewed and it is shown that one can describe these phenomena in terms of a macroscopic dielectric tensor by setting &mgr;=1. This is true even when the microscopic origins of the dielectric constant are magnetic‐dipole transitions. For the case of electric‐dipole transitions, the dispersive magneto‐optical effects (i.e., Faraday or Voigt effects) can be interpreted in terms of an effective Hamiltonian which is related to the macroscopic dielectric tensor in a very simple manner. The form of this effective Hamiltonian follows from symmetry considerations. From the measurements of the magneto‐optical effects, one determines the constants of the effective Hamiltonian and from these one can predict the cross section for Raman scattering of light by spin excitations.