300 Sentences With "externality" | Random Sentence Generator

So we can think of reliability of supply as a positive externality, in the same way that pollution is a negative externality.

"We have to fix the unpriced externality," he said, pointing out that pollution is classic negative externality in economic terms that causes harm to all, but cost to none.

If I'm reading it correctly the "externality" is carbon pollution.

The examples so far are the negative sort of externality.

By his accounting, the market is an externality that is,

Economists recommend governments use taxes and regulations to minimize this negative externality.

Could you clarify what you mean by "The unpriced externality must be priced"?

If it isn't already, CO2 displacement will soon become wind and solar's most valuable positive externality.

But when you're in development, all of a sudden, it's one more externality you can't control.

The failure to address this negative externality places governments, enterprises, financial institutions and consumers at greater risk.

No company's main source of profit can be described with a straight face as a negative externality.

But in health care markets, decisions often affect unwitting bystanders, a phenomenon that economists call an externality.

An economist might shrug: the whole point is to raise the price for whoever is generating the externality.

"[Higher wages] might be a positive externality for workers, but might be a negative political feature," Burman tells me.

We need to realize that companies that lay off workers are offloading a huge negative externality, an external cost, onto society.

Their fundamental value is ZERO or actually negative ... if you price correctly their negative externality of hogging energy and destroying the environment.

The most efficient remedy for this kind of failure is to price the externality in to the market via a Pigouvian tax.

True to their cause, the high-minded theorists of facile externality go out of their way to make their ideas hard to understand.

In the past year facile externality has started to gain traction (a term that, in itself, demonstrates the centrality of friction to progress).

The economic term for such a spillover is a "negative externality," which occurs when one person's consumption harms the well-being of others.

For Trump, that's a priceless externality and his administration may be willing to reward Musk copiously, with everything from tax breaks to environmental regulations.

Matt Taibbi was warning on this show this week that the Democrats efforts to impeach trump actually have the bad externality of helping Joe Biden.

There is no market solution because the insecurity is what economists call an externality: it's an effect of the purchasing decision that affects other people.

Rather than resort to government ownership, the usual economic response to a positive externality is to encourage private firms to provide more of the service.

The classic negative externality is pollution: A factory burning coal or a car using gasoline can harm the air and environment for those around it.

"I'm sure you'll get multiple answers, but this interest would be occurring the same way regardless of the externality of interest in Russia," Jason Thielman, Sen.

Unaffordable rents are not a personal failing or an inevitable outcome of the market; they are a corporate externality as toxic as smog or acid rain.

It would be nice to believe that politicians set Pigouvian taxes merely in order to price in an externality, but the evidence, and common sense, suggests otherwise.

Accounting for both methane and transportation externality costs would justify increasing the surface-mine royalty rate from 12.5 percent to 82.6 percent for Powder River Basin coal.

But these are not narratives of proof and externality; rather they are intimate expressions of the silences that give us pause from the weight of the unspeakable.

ND: I read it as a meditation on the mask as a metaphor: this kind of internality/externality, the idea of being able to project a psychological aspect.

We can have the industrial agriculture system we have now, with all the meat we have now, but there's this externality of enormous cruelty and terrible environmental damage.

Herd immunity is a classic example of a positive externality: A community, at no additional cost, becomes more protected against a disease when an individual chooses to get vaccinated.

Predictably, an individual refusing to get vaccinated would create a negative externality, and cause everyone else in a school, neighborhood, airport, or theme park to lose their herd immunity.

Pollution is what economists call a "negative externality": Drivers get the benefits of the gas they burn when they drive to work, but everyone else gets the bad emissions.

It would be a mistake to ban ride-hailing services and thus deprive people of something useful, but it would be equally mistaken to ignore the congestion externality issue.

"Additional bank risk-taking induced by the collateral policy change could impose a negative externality on the state through loan guarantees," authors Sjoerd Van Bekkum, Marc Gabarro and Rustom Irani wrote.

By guaranteeing access to new customers' data and contacts, a Social Graph Portability Act would reduce the network externality dimension of the existing digital platforms and ensure the benefits of competition.

Twitter's troll centers in Latin America aren't an unfortunate minor externality or a regional nuance: they're a business model that threatens to take away any value that the platform might create.

You as an individual opting out of that overconsumption fails to address the problem because it pushes the price down, leaving the externality unpriced and continuing the trend of global overconsumption.

The invisible hand of the market fumbles, leading resources astray…Children, just like cigarettes or mobile phones, clearly impose a negative externality on people who are near them… The solution is obvious.

The very real possibility that a party with meager resources can potentially influence a democratic election represents an incalculable "externality" imposed on us through a trust vulnerability in our social media ecosystem.

As every Economics 101 student learns, pollution is the classic negative externality — a cost that arises out of an economic activity but isn't borne by the parties directly involved in that activity.

Though research into more cost-effective technology for carbon capture and sequestration or solar power is helpful and necessary, a carbon price incorporating the negative externality of pollution would seem a simple first step.

"If countries were to price their own carbon emissions at their own [country-level social cost of carbon], approximately 5 [percent], a small amount, of the global climate externality would be internalized," the researchers wrote.

It's been the fastest, easiest, most risk-free way to build a business ever, not least because companies have largely been able to reap the rewards and face few consequences; responsibility has been an externality.

But Mr Gates seems to suggest that investment in robots is a little like investing in a coal-fired generator: it boosts economic output but also imposes a social cost, what economists call a negative externality.

Theoretically, if the tax is set at the correct social cost of the externality, the market becomes more efficient, with better information; it inexorably finds the "right" level of pollution, based on full costs and benefits.

The undesirable externality would be that a huge number of people across Europe and Asia, who might have rightly expected at least another Android OS version update, would find themselves with lesser devices than they paid for.

Understanding that the widespread belief in disinformation may have been an unforeseen externality of Facebook's design is more interesting than helpful, especially as Facebook says it will look to the wisdom of the crowd for solutions to its problems.

Yet just as too much of a good thing (travel, say) can yield a bad (congestion), so excessive ease in transactions can generate costs, known in the jargon as a "facile externality", such that less efficiency would actually be more efficient.

"In textbook economics, you set the price equal to the marginal damages, and that gives you a cost-efficient reduction in the damages caused by the externality," says Marc Hafstead, director of the Carbon Pricing Initiative at Resources for the Future.

In this argument, rapid change, when it takes place across many industries at once, is a negative externality that we need to try to account for, particularly "when the economic insecurity leads to a desperate and extreme politics," Mr. Johnson said.

It underscores how consumption in rich countries that import things increases carbon emissions in poor countries that export those things, but it doesn't measure factors like how foreign investment from one country might increase the welfare in another — a positive externality.

I think, you now, it's really clear that there was no collusion, and there is lots of media speculation, and, again, we see the negative externality of this, that anybody who tries to bring Russia and US closer together is viewed negatively.

Such findings lend support to the view of David Autor of MIT that the use of temping agencies, while beneficial to individual workers and firms, "may exert a negative externality on the aggregate labour market—that is, it is a 'public bad'."

Economists call this a "positive externality" problem, which means that suppliers are producing less than is socially optimal because they are not considering the economic spillover benefits to other parties who would use Internet access to grow their businesses and hire more employees.

Before this truck rule and the other components of the Obama climate policy were promulgated, the administration conducted an "analysis" of the "social cost of carbon" (SCC), in order to generate an estimate of the marginal externality cost of greenhouse gas emissions (GHG).

Co-authored by former Republican Secretaries of State James Baker and George Shultz, the plan provides for carbon pricing to use the market to account for the externality costs in fossil fuels, encourage investment in energy efficiency, and replace fossil fuels with clean energy.

Everyone I know in energy-nerd world has their own bespoke objection to RPSs: They are too strong, or too weak, they should include this or that other technology, they don't solve systemic externality issues, they are just a bargaining chip for carbon taxes.

This gets into what economists call an "externality": a side effect of a product that has a negative impact on society as a whole but isn't reflected in its price, which can skew consumers toward favoring or embracing a cheap product that is in fact dangerous.

The disappearing Form D Finally, and this is thinking a bit more selflessly so apologies to some founders who aren't used to that, but your funding announcement can offer a positive externality in a marketplace that is feverishly waiting to hear upbeat news around venture capital.

And so the first dimension of the Post's confusion is straightforward: The proposed tax would have only a trivial effect on temperatures — zero, as a matter of statistical significance — that is, on the assumed underlying externality, a reality that belies the common assumption that such a tax would improve the efficiency of resource allocation.

There's a certain kind of fantasy novel that feels tinkered over, far past the point of usefulness, to such a degree that the author's preoccupation with his special world supersedes, in an odd way, the book for which it was invented — the book becoming only an artifact of the process, an externality, rather than its endpoint.

That is, when markets and people interact in ways that are harmful for human welfare, there's a well-established economic rationale for the government to step in and fix the problem by "internalizing the externality," meaning making the persons or institutions that are, in this case, polluting the environment pay for the damage they're doing to the rest of us.

The social profit from a firm's activities is the accounting profit plus or minus any externalities or consumer surpluses that occur in its activity. An externality including positive externality and negative externality is an effect that production/consumption of a specific good exerts on people who are not involved. Pollution is an example for negative externality. Consumer surplus is an economic indicator which measures consumer benefits.

There is an important conceptual distinction between a demerit good and a negative externality. A negative externality occurs when the consumption of a good has measurable negative consequences on others who do not consume the good themselves. Pollution (due, for example, to automobile use) is the canonical example of a negative externality. By contrast, a demerit good is viewed as undesirable because its consumption has negative effects upon the consumer for example cigarette.. Cigarettes have both properties – they are a demerit good because they damage the smoker's own health, but they also produce the negative externality of damage to others via second-hand smoke.

Based on the Externality Paradigm, prudential capital controls, as one of the prudential regulations, are called to deal with the typical market imperfection known as the pecuniary externality in an open economy in order to curb the destabilizing effects of capital flows on domestic financial market.

The Externality Paradigm.De la Torre, A. and Lze, A. (2009). Regulatory reform: Integrating paradigms. The World Bank.

The contribution of transport systems to potentially hazardous climate change is a significant negative externality which is difficult to evaluate quantitatively, making it difficult (but not impossible) to include in transport economics-based research and analysis. Congestion is considered a negative externality by economists. An externality occurs when a transaction causes costs or benefits to third party, often, although not necessarily, from the use of a public good. For example, manufacturing or transportation cause air pollution imposing costs on others when making use of public air.

In new institutional economics and other fields focusing on public policy, economists seek to judge when and whether governmental intervention (such as taxes, welfare, and government regulation) can result in potential gains in efficiency. According to Gregory Mankiw, a New Keynesian economist, governmental intervention can improve on market outcomes under conditions of "market failure," or situations in which the market on its own does not allocate resources efficiently. Market failure occurs when an externality is present and a market either underproduces a product with a positive externality, or overproduces a product that generates a negative externality. Air pollution, for instance, is a negative externality that cannot be incorporated into markets as the world's air is not owned and then sold for use to polluters.

Workplace wellness programs have many components to help improve health outcomes and decrease health disparities. These components include: smoking cessation programs, fitness center memberships, nutrition aids, and biometric screenings, often in exchange for health insurance premium reductions. By doing so, workplace wellness programs create a positive externality. Due to increased health benefits, workplace wellness programs create a positive externality.

A coal power plant in Germany. Due to emissions trading, coal may become a less competitive fuel than other options. Pollution is a prime example of a market externality. An externality is an effect of some activity on an entity (such as a person) that is not party to a market transaction related to that activity.

To curb the amplification mechanism, mitigating the pecuniary externality that results in the excessive risk-taking and excessive capital inflow for an open economy is the key,Jeanne, O., and A. Korinek, 2010, “Managing Credit Booms and Busts: A Pigouvian Taxation Approach,” NBER Working Paper, w16377. As proved by Greenwald and Stiglitz (1986), in the presence of pecuniary externality and market incompleteness, some policy intervention that aims to reduce the pecuniary externality problem could achieve larger social benefits while incur only small social cost. This justifies the role for external intervention. In the case of excessive external borrowing problem in the open economy, the prudential capital controls are the desired regulations that kick in to induce private agents to internalize the externality and to reduce the excessive risk-taking exposures.

A negative externality is any difference between the private cost of an action or decision to an economic agent and the social cost. In simple terms, a negative externality is anything that causes an indirect cost to individuals. An example is the toxic gases that are released from industries or mines, these gases cause harm to individuals within the surrounding area and have to bear a cost (indirect cost) to get rid of that harm. Conversely, a positive externality is any difference between the private benefit of an action or decision to an economic agent and the social benefit.

Wind power externality costs were found to be 0.09 - 0.12c€/kW, while nuclear energy had a 0.19 c€/kWh value and fossil fuels generated 1.6 - 5.8 c€/kWh of downstream costs.ExternE. The EU's Externality study.Page 37 Except for the latter fossil fuels, these are negligible costs in comparison to the cost of electricity production, which is approximately 10 c€/kWh in European countries.

Kobayashi and Inaba argue that the Japanese economy has shifted to a stagnant equilibrium because of an external diseconomy, which they call the complexity externality.

This paradigm, however, assumes that risk arises from individual malfeasance, and hence it is at odds with the emphasis on the system as a whole which characterizes the macroprudential approach. In the externalities paradigm, the key concept is called pecuniary externality. This is defined as an externality that arises when one economic agent's action affects the welfare of another agent through effects on prices.

He held the post until 1943. Pigou's most enduring contribution was The Economics of Welfare, 1920, in which he introduced the concept of externality and the idea that externality problems could be corrected by the imposition of a Pigovian tax (also spelled "Pigouvian tax"). In The Economics of Welfare (initially called Wealth and Welfare), Pigou developed Marshall’s concept of externality, which is a cost imposed or benefit conferred on others that is not accounted for by the person who creates these costs or benefits. Pigou argued that negative externalities (costs imposed) should be offset by a tax, while positive externalities should be offset by a subsidy.

Eisenstein , Charles (2011), "Sacred Economics: Money, Gift and Society in an Age in Transition" (Evolver Editions) As social ecological economist Clive Spash has noted, externality theory fallaciously assumes environmental and social problems are minor aberrations in an otherwise perfectly functioning efficient economic system. Copy also available at Internalizing the odd externality does nothing to address the structural systemic problem and fails to recognize the all pervasive nature of these supposed 'externalities'.

A positive externality is anything that causes an indirect benefit to individuals. For example, planting trees makes individuals' property look nicer and it also cleans the surrounding areas.

This model can be used as a basis to evaluate different methods of internalizing the externality. Some examples include tariffs, a carbon tax and cap and trade systems.

To confront parties with the issue, the economist Arthur Pigou proposed taxing the goods (in this case hydrocarbon fuels), which were the source of the negative externality (carbon dioxide) so as to accurately reflect the cost of the goods' production to society, thereby internalizing the costs associated with the goods' production. A tax on a negative externality is called a Pigovian tax, and should equal the marginal damage costs. Within Pigou's framework, the changes involved are marginal, and the size of the externality is assumed to be small enough not to distort the rest of the economy. According to the scientific consensus, the impact of climate change may result in catastrophe and non- marginal changes.

Treating the environment as an externality may generate short- term profit at the expense of sustainability.Kinsley, M. (1977). "Sustainable development: Prosperity without growth." Rocky Mountain Institute, Snowmass, Colorado, USA.

Expenditure cascades employ positional externalities, which may be inter-related differently from other types of externalities. When a new purchase changes the context within which an existing positional good is evaluated, a positional externality occurs. In situations where a good is upgraded and becomes a popular item to own, that good becomes a positional externality. It has changed the context within which that good exists. Positional Externalities also have an effect on an individual’s happiness.

The way to eliminate some of the negative externality is there can be a tax placed on the resource to increase the marginal cost. When they tax the right amount the user will use the resource at the socially acceptable level. The other way to affect the externality is to create a subsidy. A subsidy will increase the marginal benefit in order to get to the socially accepted level of use for the resource.

One possible version of a centipede game could be played as follows: The addition of coins is taken to be an externality, as it is not contributed by either player.

It was named Dynamic externality, combining both the "external" aspects of religiosity and fate control, and the "dynamic" aspects of Reward for application. Only one item from Social complexity appeared.

This problem belongs to everyone, because consumers in well-regulated places constitute the biggest customers of the factories that operate in the inadequately regulated or inspected places, meaning that externality is involved.

"Work Schedules and Community Ties." Work and Occupations, in press.Lesnard, Laurent. 2008. “Off-Scheduling within Dual-Earner Couples: An Unequal and Negative Externality for Family Time.” American Journal of Sociology 114:447-90.

A pecuniary externality occurs when the actions of an economic agent cause an increase or decrease in market prices. For example, an influx of city-dwellers buying second homes in a rural area can drive up house prices, making it difficult for young people in the area to get onto the property ladder. The externality operates through prices rather than through real resource effects. This is in contrast with technological or real externalities that have a direct resource effect on a third party.

While paying tickets may be an undesired cost to pay by those who are given the ticket, ticket payments can actually have positive impacts in reducing the externality (discussed above) and increasing the total welfare of society. Ticket revenue often goes to state or local needs. For example, revenue from tickets can be used to improve local/state infrastructure and public schooling. The effects of ticketing this negative consumption externality of mobile phone use while driving can be seen below.

One application treats various forms of information (spam, advertising) as a form of pollution or 'detrimental externality'. In economics, an externality is a by-product of a production process that imposes burdens (or supplies benefits), to parties other than the intended consumer of a commodity. For example; air and water pollution are ‘negative’ externalities that impose burdens on society and the environment. A market-based approach to controlling externalities was outlined in Ronald Coase's The Problem of Social Cost (1960).

A river carries not only water but also pollutants coming from agricultural, biological and industrial waste. River pollution is a negative externality: when an upstream country pollutes a river, this creates external cleaning costs for downstream countries. This externality may result in over-pollution by the upstream countries. Theoretically, by the Coase theorem, we could expect the countries to negotiate and achieve a deal in which polluting countries will agree to reduce the level of pollution for an appropriate monetary compensation.

The goal of a cost- sharing mechanism is to divide this externality among the agents. There are various cost-sharing mechanisms, depending on the type of product/service and the type of cost-function.

However, if the externality arises on the consumption side, there will be two demand curves instead (private and social benefit). This distinction is essential when it comes to resolving inefficiencies that are caused by externalities.

Similarly, there might be two curves for the demand or benefit of the good. The social demand curve would reflect the benefit to society as a whole, while the normal demand curve reflects the benefit to consumers as individuals and is reflected as effective demand in the market. What curve is added depends on the type of externality that is described, but not whether it is positive or negative. Whenever an externality arises on the production side, there will be two supply curves (private and social cost).

Environmental Economics for Tree Huggers and Other Skeptics, p. 80 (Island Press 2012): "Economists often say that externalities need to be 'internalized,' meaning that some action needs to be taken to correct this kind of market failure." The most common way this is done is by imposing taxes on the producers of this externality. This is usually done similar to a quote where there is no tax imposed and then once the externality reaches a certain point there is a very high tax imposed.

This evolved from an article on the Federal Communications Commission (1959), in which Coase claimed that radio frequency interference is a negative externality that could be controlled by the creation of property rights. Coase's approach to the management of externalities requires the careful specification of property rights and a set of rules for the initial allocation of the rights. Once this has been achieved, a market mechanism can theoretically manage the externality problem. The solution is not necessarily simple in its application to media content (1996).

Consumption and production waste: another externality of tobacco use. Tobacco Control, 8, 75-80. Estimates on the required time for cigarette butts to break down vary, ranging from five years to 400 years for complete degradation.

These properties lead to externality, free ridership, and spillover effects that distort perfect competition and market efficiency. Hence, government becomes the best actor to supply the public goods.Myles, G. D. (1995) Public Economics. Cambridge University Press.

Diamond's model is an example of a "thick-market externality" that causes markets to function better when more people and firms participate in them.Mankiw, N. Gregory; Romer, David (1991). New Keynesian economics 1. Cambridge, Mass: MIT Press.

Tourism is sometimes associated with export or theft of contraband such as endangered species or certain cultural artifacts, and illegal sex trade activities.Biagi, Bianca, and Claudio Detotto. "Crime as tourism externality." Regional Studies 48.4 (2014): 693-709.

Air pollution from motor vehicles is an example of a negative externality. The costs of the air pollution for the rest of society is not compensated for by either the producers or users of motorized transport. In economics, an externality is the cost or benefit that affects a third party who did not choose to incur that cost or benefit. Externalities often occur when the production or consumption of a product or service's private price equilibrium cannot reflect the true costs or benefits of that product or service for society as a whole.

Whereas public goods are typically under-provided by decentralized decision making (the market), public bad will generally be over-provided, since the parties generating the public bad do not account for the negative effects (or externality) imposed on others. One possibility to mitigate the existence of public bad is the intervention of a third party, typically the state. In "green economics", it is a good that produces socially undesirable results (or an externality in standard economics). Most "green economists" advise measuring such impacts back to the present from the seventh generation.

Coase uses the ruling of "Bryant v. Lefever" to explore the reciprocal nature of externality. Bryant v. Lefever concerns a conflict between neighbors, in which one neighbor constructed a wall such that the other neighbor’s chimney would smoke.

Ecotaxes on gasoline, diesel fuel and vehicles cover the social cost of carbon from the road transport sector, however being nationwide they are not designed to cover the negative externality of health costs due to local air pollution in cities.

In economics and mechanism design, a cost-sharing mechanism is a process by which several agents decide on the scope of a public product or service, and how much each agent should pay for it. Cost-sharing is easy when the marginal cost is constant: in this case, each agent who wants the service just pays its marginal cost. Cost-sharing becomes more interesting when the marginal cost is not constant. With increasing marginal costs, the agents impose a negative externality on each other; with decreasing marginal costs, the agents impose a positive externality on each other (see example below).

While the health costs are the most obvious, the following sections provide more insight into the negative externalities suffered by the California public. Air pollution in California is a negative externality which arises from the combustion of fossil fuels or other forms of greenhouse gas emissions. As the graphs shows, the effects of this negative externality is a deadweight welfare loss (DWL) that results when the marginal benefit does not equal the marginal cost. There have been studies conducted that point to the possibility of fertilized land being the cause of the vast amounts of smog in suburban areas.

Interoperability, which is the ability of a product or system to work with other products or systems, is a consequence of connectivity. For instance, the music industry is interoperable, because some music platforms have integrated social media platforms. Another of connectivity is network externality.

An externality exists when a person makes a choice that affects other people in a way that is not accounted for in the market price. An externality can be positive or negative but is usually associated with negative externalities in environmental economics. For instance, water seepage in residential buildings occurring in upper floors affect the lower floors.Rita Yi Man Li (2012), The Internalisation Of Environmental Externalities Affecting Dwellings: A Review Of Court Cases In Hong Kong, Economic Affairs, Volume 32, Issue 2, pages 81–87 Another example concerns how the sale of Amazon timber disregards the amount of carbon dioxide released in the cutting.

Externalities occur where there are significant social costs or benefits from production or consumption that are not reflected in market prices. For example, air pollution may generate a negative externality, and education may generate a positive externality (less crime, etc.). Governments often tax and otherwise restrict the sale of goods that have negative externalities and subsidize or otherwise promote the purchase of goods that have positive externalities in an effort to correct the price distortions caused by these externalities. Elementary demand-and-supply theory predicts equilibrium but not the speed of adjustment for changes of equilibrium due to a shift in demand or supply.

This causes the externality competitive equilibrium to not be a Pareto optimality. Externalities can be either positive or negative. Governments and institutions often take actions to internalize externalities, thus market-priced transactions can incorporate all the benefits and costs associated with transactions between economic agents.Jaeger, William.

When the users spend time on a page or click on links, this creates a positive externality for the advertiser displaying a banner there. The digital Multinational enterprises (MNEs) do not collect revenue from the user side but from the advertiser side, thanks to the sale of online advertisement.

However, since regulators do not always have all the information on the externality it can be difficult to impose the right tax. Once the externality is internalized through imposing a tax the competitive equilibrium is now Pareto optimal. For example, manufacturing activities that cause air pollution impose health and clean-up costs on the whole society, whereas the neighbors of individuals who choose to fire-proof their homes may benefit from a reduced risk of a fire spreading to their own houses. If external costs exist, such as pollution, the producer may choose to produce more of the product than would be produced if the producer were required to pay all associated environmental costs.

The prudential capital controls should differentiate the types of capital inflow based on their contributions to the systemic risk. Since different forms of capital inflow would result in different probabilities of future capital outflows with different payoff characteristics in the event of a crisis, thus they lead to different degrees of negative externality. In the case of an emerging market economy, Korinek (2010) found that dollar debt imposes a larger negative externality, followed by CPI-indexed debt that hedges against the exchange rate risk as dollar debt suffers, local currency debt and portfolio investment. The non-financial foreign direct investment often stays in the country when a financial crisis occurs so that it has no externalities.

While the existence of negative externalities seems consensual, the existence of positive externalities of the automobile does not have consensus amongst economists and experts in the transportation sector. The creation of jobs or the fact that the related industries pay taxes, cannot be considered, as such, as positive externalities, because any legal economic activity pays taxes, and the big majority also needs job demand. Time saving to the driver, and therefore, eventually more personal production, cannot either be considered a positive externality, because the driver has already taken those factors into account when they opted to use their car, and therefore these factors cannot be considered, by many authors, a pure externality.

Zivin, Just, and Zilberman (2006)Graff Zivin, J, R Just, and D Zilberman, “Risk Aversion, Liability Rules, and Safety,” International Review of Law and Economics, 4(2006): 604-623. investigates the Coase theorem under stochastic externality. Ronald Coase famously won the Nobel prize for his work claiming that a competitive system with well-defined property right assignments, perfect information, and zero transaction costs would attain Pareto optimality through a process of voluntary bargaining and side payments. This paper investigates this claim in the context of a stochastic externality problem and finds that, when at least one agent is risk averse, optimal outcomes are not independent of the initial assignment of property rights.

In economics, an externality occurs when the producer does not have to pay its full cost, and when it affects another party either positively or negatively. If the cost to society is greater than the cost the consumer is paying for it, then the externality is negative because it imposes this extra cost on society, which can lead to market inefficiencies. Solving the problem of negative externalities can be costly on its own, as it is often difficult to assign responsibility. Typically, the party who owns the property rights to the polluted area is responsible for paying the cost, but alternative strategies include taxing the producer or collecting payments from a determined group of individuals.

The Stern Review Report on the Economics of Climate Change was produced by a team led by Stern at HM Treasury, and was released in October 2006. In the review, climate change is described as an economic externality. Stern has subsequently referred to the climate change externality as the largest ever market failure: > Climate change is a result of the greatest market failure the world has > seen. The evidence on the seriousness of the risks from inaction or delayed > action is now overwhelming ... The problem of climate change involves a > fundamental failure of markets: those who damage others by emitting > greenhouse gases generally do not pay Regulation, carbon taxes and carbon trading are recommended to reduce greenhouse gas emissions.

The work by Karl William Kapp explains why the concept of "externality" is a misnomer.Kapp, Karl William (1963) The Social Costs of Business Enterprise. Bombay/London, Asia Publishing House. In fact the modern business enterprise operates on the basis of shifting costs onto others as normal practice to make profits.

He introduced the concept of internal quantum state of living systems that maintains their computational properties and determines morphogenesis and evolution. Evolution of social systems is viewed by Igamberdiev as a continuous generation and interaction of reflexive models of externality that trigger social dynamics and establish the structure of societies.

Many governments have begun subsidizing electric vehicles. With the intention of correcting the positive externality that electric vehicles contribute to the environment. This has been implemented through the use of tax credits, purchase rebates, and tax exemptions."Global EV Outlook 2007: Two million and counting" International Energy Agency. 2017-10-07.

Hence, it is considered the third branch of geography,David Demeritt (2009): From externality to inputs and interference: framing environmental research in geography. In: Transactions of the Institute of British Geographers 34 (1), pp. 3–11, DOI: 10.1111/j.1475-5661.2008.00333.x. the other branches being physical and human geography.

They develop a model showing that foreign reserve accumulation by currency under-devaluation could be a second-best policy in economies with learning-by-investing externality. Though there is static loss, a higher relative price of tradable goods could lead to a dynamic gain through higher rate of capital accumulation.

If individuals do not have social insurance and are thereby unable to afford the basic right of healthcare, then not only are they subjecting themselves to illnesses but also creating the likelihood that others around them will be infected as well. This would be an example of a negative externality.

This means that firms do not "internalize" the "external" cost of unemployment they do not factor how large-scale unemployment harms society when assessing their own costs. This leads to a negative externality as marginal social cost exceeds the firm's marginal cost (MSC = Firm's Private Marginal Cost + Marginal External Cost of increased social unemployment) # There are also positive externalities: each firm increases the asset value of unemployment for all other firms when they hire during recessions. By creating hypercompetitive labor markets, all firms (the winners when laborers compete) experience an increase in value. However, this effect of increased valuation is very unapparent, because the first problem (the negative externality of sub-optimal hiring) clearly dominates since the 'natural rate of unemployment' is always too high.

The theoretical background for tradable smoking pollution permits has been outlined by economist Ted Bergstrom of the University of California, Santa Barbara."Lecture 5: Externalities" by Ted Bergstrom (see "Creating Markets for Externality Permits", page 7) Bergstrom models the negative effects of smoking on others as an externality problem that is caused by a "missing market"—no market exists in which non-smokers and smokers can form agreements to internalize the external costs of smoking. In Bergstrom's model, governments fill in this missing market by introducing a new commodity, "smoking permits," along with a law requiring smokers (or smoke-emitting firms) to purchase permits. The government then produces a fixed supply of smoking permits and distributes them in some way among smoke emitters.

Such a problem of excessive borrowing rooted on the pecuniary externality and market incompleteness can be much more severe when some financial amplification mechanism is present:Paul Krugman, 1999. "Balance Sheets, the Transfer Problem, and Financial Crises," International Tax and Public Finance, Springer, vol. 6(4), pages 459-472, November.Aghion, Philippe & Bacchetta, Philippe & Banerjee, Abhijit, 2000.

In other words, the pigouvian tax should be set equal to the magnitude of the externalities of different inflow types.Korinek, Anton, 2010. " Regulating Capital Flows to Emerging Markets: An Externality View ", Mimeo. University of Maryland. Based on Korinek’s (2010) estimated the optimal annual magnitude of externalities for various types of capital inflows for Indonesia.

California, involved the advertising and sale of obscene materials. All earlier cases were decided with the negative externality of obscenity in mind. They reasoned that members of the public, especially impressionable children, should have a valid expectation to not be inadvertently exposed to obscenity. Public display of obscenity was deemed an "important interest" in Roth.

If affected parties can compel polluters to compensate them they will reduce or eliminate the externality. Market proponents advocate changes to the legal system that empower affected parties to obtain such compensation. They further claim that governments have limited affected parties' ability to do so by complicating the tort system to benefit producers over others.

He pointed out that surpluses lead to weak global aggregate demand – countries running surpluses exert a "negative externality" on trading partners, and posed far more than those in deficit, a threat to global prosperity. In "National Self-Sufficiency" The Yale Review, Vol. 22, no. 4 (June 1933), he already highlighted the problems created by free trade.

The atmosphere is an international public good and GHG emissions are an international externality (Goldemberg et al., 1996:,21, 28, 43). A change in the quality of the atmosphere does not affect the welfare of all individuals and countries equally. In other words, some individuals and countries may benefit from climate change, but others may lose out.

This applies to the cases that Coase investigated. Cattle trample a farmer's fields; a building blocks sunlight to a neighbor's swimming pool; a confectioner disturbs a dentist's patients etc. In each case the source of the externality is matched with a particular victim. It does not apply to pollution generally, since there are typically multiple victims.

2002 Notwithstanding these restrictive assumptions, the equivalence version helps to underscore the Pigouvian fallaciesPigou, Arthur C., The Economics of Welfare, 4th edition. London: Macmillan and Co. 1932 that motivated Coase. Pigouvian taxation is revealed as not the only way to internalize an externality. Market and contractual institutions should also be considered, as well as corrective subsidies.

If the government can accurately gauge the social cost, the tax could equalize the marginal private cost and the marginal social cost. In more specific terms, the producer would have to pay for the non-pecuniary externality that it created. This would effectively reduce the quantity of the product produced, moving the economy back to a healthy equilibrium.

The Circles of Sustainability approach is explicitly critical of other domain models such as the triple bottom line that treat economics as if it is outside the social, or that treat the environment as an externality. It uses a four-domain model - economics, ecology, politics and culture. In each of these domains there are 7 subdomains.

His views are grounded on two presuppositions: # The utter aversion of common sense to any theory of representative perception # The difference between imagination and sense perception is only one of degree. The former is the basis of the negative part of his argument; the latter supplies him with all the positive account he has to give, and that is meagre enough. The Clavis consists of two parts. After explaining that he will use the term external world in the sense of absolute, self-existent, independent matter, he attempts in the first part to prove that the visible world is not external, by showing first, that the seeming externality of a visible object is no proof of real externality, and second, that a visible object, as such, is not external.

Pollution has a cost.The staggering economic cost of air pollution By Chelsea Harvey, Washington Post, January 29, 2016Freshwater Pollution Costs US At Least $4.3 Billion A Year, Science Daily, November 17, 2008The human cost of China's untold soil pollution problem, The Guardian, Monday 30 June 2014 11.53 EDT Manufacturing activities that cause air pollution impose health and clean-up costs on the whole of society, whereas the neighbors of an individual who chooses to fire-proof his home may benefit from a reduced risk of a fire spreading to their own homes. A manufacturing activity that causes air pollution is an example of a negative externality in production. A negative externality in production occurs “when a firm’s production reduces the well-being of others who are not compensated by the firm.

Several key areas have been targeted for economic analysis and reform: the environmental effects of unconstrained economic growth; the consequences of nature being treated as an economic externality; and the possibility of an economics that takes greater account of the social and environmental consequences of market behavior.Hawken, P., Lovins, A. B. & L. H. (1999). Natural Capitalism: Creating the Next Industrial Revolution. Snowmass, Colo.

Internalizing the odd externality does nothing to address the structural systemic problem and fails to recognize the all pervasive nature of these supposed 'externalities'. This is precisely why heterodox economists argue for a heterodox theory of social costs to effectively prevent the problem through the precautionary principle.Berger, Sebastian (ed) (2015). The Heterodox Theory of Social Costs by K. William Kapp.

Two British economists are credited with having initiated the formal study of externalities, or "spillover effects": Henry Sidgwick (1838–1900) is credited with first articulating, and Arthur C. Pigou (1877–1959) is credited with formalizing the concept of externalities. The word externality is used because the effect produced on others, whether in the form of profits or costs, is external to the market.

Rotter (1975) cautioned that internality and externality represent two ends of a continuum, not an either/or typology. Internals tend to attribute outcomes of events to their own control. People who have internal locus of control believe that the outcomes of their actions are results of their own abilities. Internals believe that their hard work would lead them to obtain positive outcomes.

Diamond's model is an example of a "thick-market externality" that causes markets to function better when more people and firms participate in them. Other potential sources of coordination failure include self-fulfilling prophecies. If a firm anticipates a fall in demand, they might cut back on hiring. A lack of job vacancies might worry workers who then cut back on their consumption.

George Stigler summarized the resolution of the externality problem in the absence of transaction costs in a 1966 economics textbook in terms of private and social cost, and for the first time called it a "theorem." Since the 1960s, a voluminous amount of literature on the Coase theorem and its various interpretations, proofs, and criticism has developed and continues to grow.

In his UCLA dissertation and in subsequent work, Steven N. S. Cheung (1969) coined an extension of the Coase theorem: aside from transaction costs, all institutional forms are capable of achieving the same efficient allocation. Contracts, extended markets, and corrective taxation are equally capable of internalizing an externality. To be logically correct, some restrictive assumptions are needed. First, spillover effects must be bilateral.

And even if we can determine who exactly is responsible and who is harmed, it is incredibly cumbersome to accurately quantify these effects. People cannot easily translate their experiences to monetary values, and they are likely to overstate the harm they have suffered. At the same time, the polluters would likely underestimate the proportion of the externality that they are responsible for.

Since the expense of the spam is borne mostly by the recipient, it is effectively postage due advertising. This makes it an excellent example of a negative externality. The legal definition and status of spam varies from one jurisdiction to another, but nowhere have laws and lawsuits been particularly successful in stemming spam. Most email spam messages are commercial in nature.

Linda S. Ghent, Professor in the Department of Economics at Eastern Illinois University, discusses this episode in view of its economic themes, specifically those of externality and cost-benefit analysis. The externality here is the Kenny's neon sign: it advertises the restaurant, but it makes Kramer unhappy. But when he gets hooked on the food, he finds that the benefit of the chicken outweighs the cost of the neon glare. Eleanor Hersey, an English professor at Fresno Pacific University, discusses Peterman's company in her 1999 essay "It'll Always Be Burma to Me: J. Peterman on Seinfeld," which begins with her premise: Hersey examines Elaine's wavering corporate ambitions, her relationship with her haughty, eccentric boss and the male power structure at the company, the seduction of consumers by way of clever advertising, and the significance of Peterman's and Kramer's attitudes toward Burma.

Ayres and Levitt (1998) used a new dataset on the prevalence of LoJack automobile anti-theft devices to estimate the social externality associated with its use. They find that the marginal social benefit of Lojack is fifteen times greater than the marginal social cost in high crime areas, but that those who install LoJack obtain less than ten percent of the total social benefits.

For example, economic paradigms based on neoclassical models of closed economic systems are primarily concerned with resource scarcity, and thus prescribe legalizing the environment as an economic externality for an environmental resource management strategy. This approach has often been termed 'Command-and-control'. Colby has identified trends in the development of economic paradigms, among them, a shift towards more ecological economics since the 1990s.

Job lock has three negative implications for society. One implication is that those who want to switch jobs prefer another job because there is a higher utility associated with it (e.g. better suits their skills and talents). However, if they are “stuck” at a job, the negative externality is that they are being inefficient workers and not as productive for the company and society.

The different projects can become economically efficient by maximizing the benefits of the limited resource (water). To maximize efficiency the users need to find where marginal cost is equal to marginal benefit. It is important for supply to equal demand like in the figure below. The use of water becomes a negative externality when there is rivalry and the property rights are not well-defined.

Levitt and Porter (2001) found that drivers with alcohol in their blood are seven times more likely to cause a fatal crash than sober drivers (those above the legal limit are 13 times more likely than sober drivers). They estimate that the externality per mile driven by a drunk driver is at least thirty cents, which implies that the proper fine to internalize this cost is roughly $8,000.

However, although emissions are an externality, using energy services may result in other negative externalities, e.g., air pollution. If these other externalities are accounted for, an energy tax may be more efficient than a carbon tax alone. Another type of tax is a fee and dividend, where the money collected from the tax is returned equitably to all households, effectively taxing carbon emitters and rebating those that burn less carbon.

48-65 But many economists seem to restrict the definition to exclude costs internal to an organization.Harold Demsetz (2003) “Ownership and the Externality Problem.” In T. L. Anderson and F. S. McChesney (eds.) Property Rights: Cooperation, Conflict, and Law. Princeton, N.J.: Princeton University Press The latter definition parallels Coase's early analysis of "costs of the price mechanism" and the origins of the term as a market trading fee.

This solution does not define how we should allocates vehicles arriving between t_1 and T_1, we just can conclude that the optimal solution is not unique. If operator wants freeway not to be congested, operator can impose the congestion toll, e_0-e_1, which is the difference between the externality of freeway and alternative route. In this situation, freeway will maintain free flow speed, however alternative route will be extremely congested.

Stanley v. Georgia limited the power of the government to police the private possession of obscenity. The majority opinion defended the free and unimpeded acquisition of facts and knowledge, regardless of their apparent social value. The Court reasoned that unless the pornography is presented in a way that creates a negative externality on others, especially minors (Roth), no individual can be stopped from owning and viewing pornography in private.

Environmental pricing reform (EPR) is the process of adjusting market prices to include environmental costs and benefits. An externality (a type of market failure) exists where a market price omits environmental costs and/or benefits. In such a situation, rational (self-interested) economic decisions can lead to environmental harm, as well as to economic distortions and inefficiencies. Environmental pricing reform can be economy-wide, or more focused (e.g.

Many consider this publication the birth of economics of security. Also in 2000 at Harvard, Camp at the School of Government and Wolfram in the Department of Economics argued that security is not a public good but rather each extant vulnerabilities has an associated negative externality value. Vulnerabilities were defined in this work as tradable goods. Six years later, iDEFENSE, ZDI and Mozilla have extant markets for vulnerabilities.

Gibson, David R. 2005. “Concurrency and Commitment: Network Scheduling and its Consequences for Diffusion.” Journal of Mathematical Sociology 29:295-323.Lesnard, Laurent. 2008. “Off-Scheduling within Dual-Earner Couples: An Unequal and Negative Externality for Family Time.” American Journal of Sociology 114:447-90.Presser, H. B. 1994. “Employment Schedules among Dual-Earner Spouses and the Division of Household Labor by Gender.” American Sociological Review 59:348-64.

Ronald Coase argues that the tax placed on an industry creating a negative externality should not be changed after it is implemented.Coase, Ronald (1960), "The Problem of Social Cost", Journal of Law and Economics 3 (1): 1–44. The crux of his argument is that all social costs are reciprocal in nature. Coase argues that a factory emitting smoke is not entirely responsible for the social harm of smoky air.

Priority Sector Lending certificates have similarities with a cap and trade systems like Carbon Credits. The similarities include: system level target and tradable nature of the credits. A major difference between Priority Sector Lending Certificates and carbon credits is in the nature of the targets: lending versus a negative externality (environmental pollution). The targets in the case of Priority Sector Lending Certificates are a floor and not a cap.

Norton, , pp. 283-287 for a discussion of these concepts. Other things being equal, this externality would lower the total marginal cost of goods trading through the entrepôt. It is a well-known economic fact that in circumstances of decreasing marginal costs, economies of scale occur, which can give an advantage to early entrants that permits them to outgrow their competitors, sometimes even leading to a natural monopoly.

He appealed to the popular conviction that the proper object of sense is the sole reality, although he despaired of getting men to give up their belief in its externality, and asserted that nothing but prejudice prevented them from doing so; and there is little doubt that, if it had ever occurred to him, as it did to Berkeley, to explain the genesis of the notion of externality, he would have been more hopeful of commending his theory to the popular mind. In theology Collier was an adherent of the High Church party, though his views were by no means orthodox. In the Jacobite Mists Journal he attacked Bishop Hoadly's defence of sincere errors. His views on the problems of Arianism, and his attempt to reconcile it with orthodox theology, are contained in A Specimen of True Philosophy (1730, reprinted in Metaphysical Tracts, 1837) and Logology, or a Treatise on the Logos in Seven Sermons on John 1.

Different economists have different views about what events are the sources of market failure. Mainstream economic analysis widely accepts that a market failure (relative to Pareto efficiency) can occur for three main reasons: if the market is "monopolised" or a small group of businesses hold significant market power, if production of the good or service results in an externality (external costs or benefits), or if the good or service is a "public good".

A Colombian domestic worker. Neighborhood friends and family sharing household and childcare responsibilities is an example of non-market activity performed outside of the traditional labor market. More specifically, for example, Nancy Folbre examines the role of children as public goods and how the non-market labor of parents contributes to the development of human capital as a public service. In this sense, children are positive externality which is under-invested according to traditional analysis.

Gary Becker (1930–2014), the 1992 Nobel prize winner in economics, has mentioned that Milton Friedman and Alfred Marshall were the two greatest influences on his work. Another contribution that Marshall made was differentiating concepts of internal and external economies of scale. That is that when costs of input factors of production go down, it is a positive externality for all the firms in the market place, outside the control of any of the firms.

Hứng (inspiration) originates from emotions, which can give rise to happy feelings or sad ones, to see externality inspires hung, making people want to express their feelings and situations. Trên trời có đám mây vàng Bên sông nước chảy, có nàng quay tơ Nàng buồn nàng bỏ quay tơ, Chàng buồn chàng bỏ thi thơ học hành... Or: Gió đánh đò đưa, gió đập đò đưa, Sao cô mình lơ lửng mà chưa có chồng...

Friedrich Hayek would argue that this is knowledge which could not be provided as a "given" by any "method" yet discovered, due to insuperable cognitive limits. William Baumol as well as Polodoo (2008) have argued that it is extraordinarily difficult to measure the social costs of any externality, especially because many costs are psychological and individual.Baumol, William J. (1972). "On Taxation and the Control of Externalities," The American Economic Review, 62(3): 307–322.

The argument is that a market participant who expects government bailouts or emergency financing would engage in excessive risk taking. However, various government policy tools have been proposed to alleviate the effect of flight-to-quality phenomenon. The argument for government intervention is that flight-to-quality phenomenon is a result of insufficient risk taking generated by Knightian uncertainty. There is also an inefficiency issue generated by externality that supports rationale for prudential policy.

One example of a positive internality is the long run effect of exercising, if these are not taken into account when deciding whether to exercise. Future benefits that an individual may not take into consideration include a diminished risk of heart disease and higher bone density. A common example of a potential negative internality is the effect of smoking cigarettes on those who smoke. For the effect of secondhand smoke, see externality.

The scientific evaluation is one of the main activities coordinated and promoted by i-CERCA. The centers must undergo a complete scientific evaluation by an external body to obtain the recognition as a CERCA Center. And periodically have to undergo an external scientific evaluation (every 4 or 5 years), in accordance with the international scientific quality standards. The evaluation is carried out in line with the principles of transparency, externality and independence.

A central part of eco-capitalism is to correct for the market failure seen in the externalization of pollution. By treating the issue of pollution as an externality it has allowed the market to minimize the degree of accountability. To correct for this market failure eco-capitalism would have to internalize this cost. A prime example of this shift towards internalizing externalities is seen in the adoption of a system for carbon trading.

If property rights are well defined and if there are no transaction costs, then market participants can negotiate to a solution that internalizes the externality. Moreover, this solution will not depend on who is allocated the property right. For example, a paper mill and a resort might be on the same lake. Suppose the benefits to the resort of a clean lake outweigh the benefits to the mill of being able to pollute.

The existence of a tax can increase economic efficiency in some cases. If there is a negative externality associated with a good, meaning that it has negative effects not felt by the consumer, then a free market will trade too much of that good. By taxing the good, the government can increase overall welfare as well as raising revenue. This type of tax is called a Pigovian tax, after economist Arthur Pigou.

Between producers and consumers, there is the possibility of externalities arising. These may take the form of damages to either party, one of whom may or may not have the property rights concerning the externality. Under the assumptions of perfect information, both parties being price-takers, costless court systems, profit and utility maximization by producers and consumers respectively, no income/wealth effects, and no transaction costs, the parties may be able to meet an efficient level of compensation.Kolstad, 2011.

Thus, the cost of using payment systems like these are borne primarily by the merchant. For customers to internalize this negative externality, merchants can use pricing incentives, through surcharging, to direct their customers to paying in the most cost- effective manner for their business. Utilizing this practice, the merchants can capture more of the consumer surplus using price discrimination methods. These tactics have been stopped in many countries where regulatory requirements ban the practice from occurring.

In this way, it can be thought of as the opposite of a coordination game, where playing the same strategy Pareto dominates playing different strategies. The underlying concept is that players use a shared resource. In coordination games, sharing the resource creates a benefit for all: the resource is non-rivalrous, and the shared usage creates positive externalities. In anti-coordination games the resource is rivalrous but non-excludable and sharing comes at a cost (or negative externality).

The Church reached its greatest notoriety around the time of this 1968 United States of America vs. Kuch case but continues into the 21st century as a small, loose organization. Membership in the Church is loosely defined but is based on assent to three principles: holding the psychedelic substances as sacraments, claiming their use as a basic human right, and defining enlightenment as "the recognition that life is a dream and the externality of relations an illusion (solipsistic nihilism)".

As the multiple nuclei develop, transportation hubs such as airports are constructed which allow industries to be established with reduced transportation costs. These transportation hubs have negative externality such as noise pollution and lower land values, making land around the hub cheaper. Hotels are also constructed near airports because people who travel tend to want to stay near the source of travel. Housing develops in wedges and gets more expensive the farther it is from the CBD.

When a large number of individuals hold systematically biased beliefs, the total cost to the democracy of all these irrational beliefs could be significant. Thus, even though every individual voter may be behaving rationally, the voters as a whole are not acting in their collective self-interest. This is analogous to the tragedy of the commons. Another way of thinking about it is that each voter, by being rationally irrational, creates a small negative externality for other voters.

The scale of each of these effects depends on the elasticity of demand for each of the goods, and the embodied resource or externality associated with each good. Indirect effects are difficult to measure empirically. In the manufacturing sector, it has been estimated that there is about a 24% rebound effect due to increases in fuel efficiency. A parallel effect will happen for cost saving efficient technologies for producers, where output and substitution effects will occur.

Building on Meynet's work, if the group was the fundamental unit of societal activity, then individual actions take place within a group context and naturally impact other members in the group. This would later be refined into the idea of an externality. From these conclusions, the reasoning that Ephorist thought followed was straightforward—pursuing solely one's own interests was not only selfish but unnatural. They believed that without the community, humanity in any real sense would cease.

The wage-earning classes responded with strikes, by unionizing and by committing acts of outright violence. It was a nationwide problem that spanned nearly all industries and helped contribute to modern business conditions still seen today. Possible causes include the failure to account for the negative externality of reproduction in the face of finite natural resources which results in over-supply of labor and falling living standards for wage- laborers, depersonalization by machines and poor working conditions.

In economics, an externality is a cost or benefit that affects a party who did not choose to incur that cost or benefit. Negative externalities are a well-known feature of the "tragedy of the commons". For example, driving cars has many negative externalities; these include pollution, carbon emissions, and traffic accidents. Every time 'Person A' gets in a car, it becomes more likely that 'Person Z' and millions of others will suffer in each of those areas.

As cause of our sensations and ground of our belief in externality, he substituted for an unintelligible material substance an equally unintelligible operation of divine power. His book exhibits no traces of a scientific development. The most that can be said about him is that he was an intelligent student of Descartes and Malebranche, and had the ability to apply the results of his reading to the facts of his experience. In philosophy he is a curiosity, and nothing more.

Because the state controls all firms, they could easily factor the cost of an externality into the price of a certain resource. Because decisions are made at higher rather than lower levels, it is argued that these decisions are less likely to have undesirable environmental consequences. Furthermore, because the state uses marginal cost pricing and determines entry, Langean socialism can avoid monopolies and the accompanying lack of allocative efficiency and x-efficiency. The model claims to solve another main criticism of capitalism.

Those who suffer from external costs do so involuntarily, whereas those who enjoy external benefits do so at no cost. A voluntary exchange may reduce societal welfare if external costs exist. The person who is affected by the negative externalities in the case of air pollution will see it as lowered utility: either subjective displeasure or potentially explicit costs, such as higher medical expenses. The externality may even be seen as a trespass on their lungs, violating their property rights.

Or, as Fred Brooks put it, "You can only get something for nothing if you have previously gotten nothing for something." If one individual or group gets something at no cost, somebody else ends up paying for it. If there appears to be no direct cost to any single individual, there is a social cost. Similarly, someone can benefit for "free" from an externality or from a public good, but someone has to pay the cost of producing these benefits.

An emissions trading scheme for greenhouse gas emissions (GHGs) works by establishing property rights for the atmosphere. The atmosphere is a global public good, and GHG emissions are an international externality (p. 21). The emissions from all sources of GHGs contribute to the overall stock of GHGs in the atmosphere. In the cap-and- trade variant of emissions trading, a limit on access to a resource (the cap) is defined and then allocated among users in the form of permits.

Pigovian tax effect on output The diagram illustrates the working of a Pigovian tax. A tax shifts the marginal private cost curve up by the amount of the externality. If the tax is placed on the quantity of emissions from the factory, the producers have an incentive to reduce output to the socially optimum level. If the tax is placed on the percentage of emissions per unit of production, the factory has the incentive to change to cleaner processes or technology.

Because the manufacturer does not pay for this external cost (the cost of emitting undesirable waste into the commons), and does not include this cost in the price of the car (a Kaldor-Hicks compensation), they are said to be external to the market pricing mechanism. The air pollution from driving the car is also an externality produced by the car user in the process of using his good. The driver does not compensate for the environmental damage caused by using the car.

However, goods and services that involve negative externalities in production, such as those that produce pollution, tend to be over-produced and underpriced since the externality is not being priced into the market. Pollution can also create costs for the firms producing the pollution. Sometimes firms choose, or are forced by regulation, to reduce the amount of pollution that they are producing. The associated costs of doing this are called abatement costs, or marginal abatement costs if measured by each additional unit.

Double marginalization is a vertical externality that occurs when two firms with market power (i.e., not in a situation of perfect competition), at different vertical levels in the same supply chain, apply a mark-up to their prices. This double markup induces a deadweight loss, because the end product is priced higher than the optimal monopoly price a vertically integrated company would set, thus leading to underproduction. This deadweight loss is additive to the loss of surplus induced by monopolistic competition.

Quantification of social costs, for damages or benefits in the future resulting from current production, is a critical problem for the presentation of social costs and when attempting to formulate policy to correct the externality. For example, damages to the environment, socioeconomic or political impacts, and costs or benefits that span long horizons are difficult to predict and quantify and thus, difficult to include in a cost-benefit analysis.Zerbe, R. O. and D.D. Dively. 1994. Benefit-Cost Analysis: In Theory and Practice.

Because there is very low cost but high benefit to individual drivers in using the roads, the roads become congested, decreasing their usefulness to society. Furthermore, driving can impose hidden costs on society through pollution (externality). Solutions for this include public transportation, congestion pricing, tolls, and other ways of making the driver include the social cost in the decision to drive. Perhaps the best example of the inefficiency associated with common/public goods and externalities is the environmental harm caused by pollution and overexploitation of natural resources.

This creates a positive externality for those who enjoy a variety of water activities. Studies have also examined the economic viability of fish stocking. Hansson, Arrheniusm, and Nellbring of Stockholm University find that simple economic analysis suggests Volga pikeperch stocking can be profitable; based on the capital invested in the stock, the economic yield results in an annual interest rate of 43% (from the viewpoint of anglers). These authors also find that increased populations of stocked fish decreases manpower and equipment costs associated with each catch.

It became a greater problem for the government because the younger population was widely exposed to the obtrusive advertising of gambling houses. Teenagers missed school to crowd around slot machines hoping to win some money. This behavior affected the society’s welfare in a way that was external to the market, thus, giving rise to a negative externality. Experts from the Russian Association of Gambling Business Development claimed that approximately half a million people on a regular basis indulged in gambling in the capital city of Moscow.

There was found to be a "brain gain", instead of a "brain drain", because of emigration. One study finds that sending countries benefit indirectly in the long run on the emigration of skilled workers because those skilled workers are able to innovate more in developed countries, which the sending countries are able to benefit on as a positive externality. Greater emigration of skilled workers consequently leads to greater economic growth and welfare improvements in the long-run. The negative effects of high-skill emigration remain largely unfounded.

Attributional style (or explanatory style) is a concept introduced by Lyn Yvonne Abramson, Martin Seligman and John D. Teasdale. This concept advances a stage further than Weiner, stating that in addition to the concepts of internality-externality and stability a dimension of globality-specificity is also needed. Abramson et al. believed that how people explained successes and failures in their lives related to whether they attributed these to internal or external factors, short-term or long-term factors, and factors that affected all situations.

A merit good can be defined as a good which would be under-consumed (and under-produced) in the free market economy. This is due to two main reasons: # When consumed, a merit good creates positive externalities (an externality being a third party/spill-over effect which arises from the consumption or production of the good/service). This means that there is a divergence between private benefit and public benefit when a merit good is consumed (i.e. the public benefit is greater than the private benefit).

Economics of networks is an increasing new field on the border of economics and network sciences. It is concerned with understanding of economic phenomena by using network concepts and the tools of network science. Some main authors in this field are Sanjeev Goyal, Matthew O. Jackson and Rachel Kranton. This term should not be confused with network economics or network externality, a theory explaining that a product or service has an increasing demand, that is, the more people use it, the more utility it brings.

This accessible health care partly stems from the fear that refugees bring diseases which will impact Costa Ricans if not treated. Education is also provided to refugees due to it being a human right, as well as the positive externality it has on Costa Rican society. The influx of illegal immigrants over the past decades caused refugee rights to fall as negative stigma rose. As a result, Costa Rica has moved from being characteristically open and welcoming to refugees, to a society resistant to their presence.

Positive Externalities of Production When the marginal social cost of production is less than that of the private cost function, there is a positive externality of production. Production of public goods is a textbook example of production that creates positive externalities. An example of such a public good, which creates a divergence in social and private costs, is the production of education. It is often seen that education is a positive for any whole society, as well as a positive for those directly involved in the market.

Diagram illustrating the network effect in a few simple phone networks. The lines represent potential calls between phones. As the number of phones connected to the network grows, the number of potential calls available to each phone grows and increases the utility of each phone, new and existing. A network effect (also called network externality or demand-side economies of scale) is the effect described in economics and business that an additional user of goods or services has on the value of that product to others.

When a network effect is present, the value of a product or service increases according to the number of others using it. The classic example is the telephone, where a greater number of users increases the value to each. A positive externality is created when a telephone is purchased without its owner intending to create value for other users, but does so regardless. Online social networks work similarly, with platforms like Twitter, Facebook, and WhatsApp increasing in value to each member as more users join.

As described above, many economists believe that financial fragility arises when financial agents such as banks take on too many or too illiquid liabilities relative to the liquidity of their assets. Note that asset liquidity is also a function of the degree of stable funding available to market participants. As a result, the reliance on cheap short term funding creates a negative risk externality (Perotti and Suarez, 2011). Some economists propose that the government tax or limit such liabilities to reduce such excessive risk-taking.

Pollution pricing reform (PPR) is the process of adjusting market prices to include direct environmental impact on measurable parameters, as e.g. dust and gas exhaust from combustion engines especially in road traffic.Pollution Tax Nova ScotiaTaxation on pollution This approach differs from general ecologic taxation schemes, where the measurability of the impact is not available on short term or direct comparison of the tax affected choice for investment or operation. An externality (a type of market failure) exists where a market price omits pollution raise and affection.

A good or service could also have significant externalities, where gains or losses associated with the product, production or consumption of a product, differ from the private cost. These externalities can be innate to the methods of production or other conditions important to the market. Traffic congestion is an example of market failure that incorporates both non-excludability and externality. Public roads are common resources that are available for the entire population's use (non-excludable), and act as a complement to cars (the more roads there are, the more useful cars become).

As well as the conventional and formal subsidies as outlined above there are myriad implicit subsidies principally in the form of environmental externalities. These subsidies include anything that is omitted but not accounted for and thus is an externality. These include things such as car drivers who pollute everyone's atmosphere without compensating everyone, farmers who use pesticides which can pollute everyone's ecosystems, again without compensating everyone, or Britain's electricity production which results in additional acid rain in Scandinavia. In these examples the polluter is effectively gaining a net benefit but not compensating those affected.

"Uncertainty and the Welfare Economics of Medical Care," The American Economic Review;53(5):941-973 Factors that distinguish health economics from other areas include extensive government intervention, intractable uncertainty in several dimensions, asymmetric information, barriers to entry, externality and the presence of a third-party agent. Description and 2nd ed. preview. In healthcare, the third-party agent is the patient's health insurer, who is financially responsible for the healthcare goods and services consumed by the insured patient. Health economists evaluate multiple types of financial information: costs, charges and expenditures.

A position externality "occurs when new purchases alter the relevant context within which an existing positional good is evaluated."Robert H. Frank, "Are Positional Externalities Different from Other Externalities ? " (draft for presentation for Why Inequality Matters: Lessons for Policy from the Economics of Happiness, Brookings Institution, Washington, D.C., June 4–5, 2003). Robert H. Frank gives the following example: :if some job candidates begin wearing expensive custom-tailored suits, a side effect of their action is that other candidates become less likely to make favorable impressions on interviewers.

The usual economic analysis of externalities can be illustrated using a standard supply and demand diagram if the externality can be valued in terms of money. An extra supply or demand curve is added, as in the diagrams below. One of the curves is the private cost that consumers pay as individuals for additional quantities of the good, which in competitive markets, is the marginal private cost. The other curve is the true cost that society as a whole pays for production and consumption of increased production the good, or the marginal social cost.

It should not be thought, however, that internality is linked exclusively with attribution to effort and externality with attribution to luck (as Weiner's work – see below – makes clear). This has obvious implications for differences between internals and externals in terms of their achievement motivation, suggesting that internal locus is linked with higher levels of need for achievement. Due to their locating control outside themselves, externals tend to feel they have less control over their fate. People with an external locus of control tend to be more stressed and prone to clinical depression.

Philosophies 3: 30 and dynamics of social systems. Igamberdiev, A.U. (2017) Evolutionary transition from biological to social systems via generation of reflexive models of externality. Prog. Biophys. Mol. Biol. 131: 336–347 Abir Igamberdiev has contributed to the characterization of metabolic pathways and enzymes of plant respiratory metabolism and to the discovery that plant mitochondria use nitrite as an alternative electron acceptor under anoxia (anaerobic respiration) and produce nitric oxide, which is scavenged by phytoglobin. He developed the concept of thermodynamic buffering in metabolism that supports stable non-equilibrium dynamics of living systems.

Here the government seeks to solve market and government externalities with market-based solutions rather than through direct administrative means. Supporters argue that the market externality of pollution can be addressed through the sale of pollution permits to companies and corporations, thus allowing the market to "see" the information and "realize" the harm done by allowing the market to transmit pollution costs to society. This is presented as an alternative to direct administrative means, whereby the government would use command and control means to direct state enterprises and private firms to comply with the guidelines.

A steering tax (Often an Ecological incentive tax) is a tax which aims to change the behaviour of the tax payer, as defined by lawmakers, and not particularly to increase tax revenue. The term is not sharply definable because many tax related laws influence buyer behaviour which is not always a wanted effect (compensation reaction). The Pigovian tax is a special case of a steering tax to avoid negative Externality. An ecological tax reform is often understood to refer to the introduction of a steering tax on energy use, according to the Polluter pays principle.

The Jones family plants pear trees on their property which is adjacent to the Smith family. The Smith family gets an external benefit from the Jones family’s pear trees because they pick up whatever pears fall to the ground on their side of the property line. This is an externality because the Smith family does not pay the Jones family for utility received from gathering the fallen pears and, therefore, does not participate in the market transaction of pear production. It results in the pears being underproduced, which means too few pear trees are planted.

Most of the criticism of the Pigovian tax relates to the determination of the tax and the implementation. Pigou and Friedrich Hayek point out that the assumption that the government can determine the marginal social cost of a negative externality and convert that amount into a monetary value is a weakness of the Pigovian tax. William Baumol suggests that the measurement of social cost is almost impossible. Ronald Coase argues that all social costs are reciprocal in nature, so, once the tax is set, it must not be changed.

Reuben Smeed, the deputy director of the Transport and Road Research Laboratory was also a pioneer in this field, and his ideas were presented to the British government in what is known as the Smeed Report. Congestion is not limited to road networks; the negative externality imposed by congestion is also important in busy public transport networks as well as crowded pedestrian areas, e.g. on the London Underground on a weekday or any urban train station, at peak times. There is the classical excess in demand compared to supply.

Technological advance itself is possible in part because wealthy individuals are willing to be first purchasers of new and untested goods (e.g., early cellphone models in the early 1990s). There is a certain experimentation and risk that accompany luxury goods, and if they are found to be useful they may eventually be mass- produced and made affordable to the common person: one era's luxuries are another's commonplace goods. In short, the negative positional externality can be compensated by the public goods of infant industry effects and research and development.

Among these impacts is a increase in price flexibility and uniform pricing in traditional brick-and-mortar stores. An externality of the increasing price flexibility and uniform pricing has been a decrease in pass- through inflation. Various other studies have revealed that the Amazon Effect has forced retail malls and offline retailers to create an experience around offline shopping in order to pull business away from eCommerce. Finally, it has been discovered that eCommerce has pushed retailer to increase their incorporation of technology to make offline shopping more convenient and quicker.

Asian dust is an example of a negative externality on society. Policy choices that favor rapid industrialization and deforestation in China, Mongolia, and other Central Asian regions are imposing social costs on Eastern countries, such as Korea, Japan, and Russia in the Far East. The main cause of deforestation is due to extensive logging. Although the production of firewood and other wooden products induce deforestation, which leads to yellow dust as well as other ecological dangers, the social cost of yellow dust is not accounted for in their costs of production.

The Digital market is a market can be labeled as a ‘multi-sided’ market. The notion developed by French Nobel prize laureate Jean Tirole is based on the idea that platforms are ‘two-sided’. This feature allows to explain why these platforms can propose freely their content, with customers on one side and the software developers or advertisers on the other. On a market where multiple groups of persons interact through platforms as intermediaries, the decisions of each group affect the outcome of the other group of persons through a positive or negative externality.

15, No. 3, November 2005, pp. 231–246 The central point of issue is what Buddhist philosophers like Vasubandhu who used the term vijñapti-matra ("representation-only" or "cognition-only") and formulated arguments to refute external objects actually meant to say. Vasubandhu's works include a refutation of external objects or externality itself and argues that the true nature of reality is beyond subject-object distinctions. He views ordinary consciousness experience as deluded in its perceptions of an external world separate from itself and instead argues that all there is Vijñapti (representation or conceptualization).

The death of a symptomatic dog in 1926 ultimately led to Mazza's confirmation of the existence of the causal pathogen,Trypanosoma cruzi, in Argentina, in 1927. Mazza established Scientific Societies in seven northern provinces in 1926-27 to help coordinate his studies and diffuse information. He was assisted by, among others, Dr. Guillermo Paterson, an English Argentine epidemiologist known for his work on malaria. His efforts, however, encountered indifference and, then, resistance from the area's landed gentry, who generally saw squalor and contagious disease as an externality, and feared that Mazza's efforts might trigger a peasant revolt.

Some academics argue that youth are marginalized because they choose to separate themselves from mainstream society, opting instead to participate in alternative lifestyles and subcultures. Others, however, view this choice as a "forced choice", motivated by the fear of racial, gender and other types of discrimination. McDonald presents the example of a young black man in the UK who chooses not to go to university because "he fears discrimination as a university student". McDonald says, "This is a negative externality imposed by the socially included that is influencing the choice of the young black man in the direction of social exclusion".

Western Arabic numerals - an example of non-material inventions. Railways — probably the most important invention in land transport. (Railway station in Bratislava, Slovakia) In economic theory, inventions are one of the chief examples of "positive externalities", a beneficial side effect that falls on those outside a transaction or activity. One of the central concepts of economics is that externalities should be internalized—unless some of the benefits of this positive externality can be captured by the parties, the parties are under-rewarded for their inventions, and systematic under- rewarding leads to under-investment in activities that lead to inventions.

Demand curve with external costs; if social costs are not accounted for price is too low to cover all costs and hence quantity produced is unnecessarily high (because the producers of the good and their customers are essentially underpaying the total, real factors of production.) The graph shows the effects of a negative externality. For example, the steel industry is assumed to be selling in a competitive market – before pollution-control laws were imposed and enforced (e.g. under laissez-faire). The marginal private cost is less than the marginal social or public cost by the amount of the external cost, i.e.

Kapp, Karl William (1971) Social costs, neo-classical economics and environmental planning. The Social Costs of Business Enterprise, 3rd edition. K. W. Kapp. Nottingham, Spokesman: 305–18 Charles Eisenstein has argued that this method of privatising profits while socialising the costs through externalities, passing the costs to the community, to the natural environment or to future generations is inherently destructiveEinsentein, Charles (2011), "Sacred Economics: Money, Gift and Society in an Age in Transition" (Evolver Editions) Social ecological economist Clive Spash argues that externality theory fallaciously assumes environmental and social problems are minor aberrations in an otherwise perfectly functioning efficient economic system.

Since hydroelectric dams do not use fuel, power generation does not produce carbon dioxide. While carbon dioxide is initially produced during construction of the project, and some methane is given off annually by reservoirs, hydro generally has the lowest lifecycle greenhouse gas emissions for power generation.Lifecycle greenhouse gas emissions pg19 Compared to fossil fuels generating an equivalent amount of electricity, hydro displaced three billion tonnes of CO2 emissions in 2011. According to a comparative study by the Paul Scherrer Institute and the University of Stuttgart, hydroelectricity in Europe produces the least amount of greenhouse gases and externality of any energy source.

In this approach, marginal cost is roughly depicted as increasing function in traffic congestion. In traffic flow approach, the marginal cost of the trip can be expressed as sum of the cost(delay time, w) experienced by the driver and the externality(e) that a driver imposes on the rest of the users.Juan Carlos Muñoz and Jorge A. Laval. “System optimum dynamic traffic assignment graphical solution method for a congested freeway and one destination”. Transportation Research Part B : Methodological (2006) Suppose there is a freeway(0) and an alternative route(1), which users can be diverted onto off-ramp.

Howard T. Markey (chief judge of the United States Court of Customs and Patent Appeals and later of the Court of Appeals for the Federal Circuit), Special Problems in Patent Cases, 66 F.R.D. 529, 1975. Specifically, "[t]he patent internalizes the externality by giving the [inventor] a property right over its invention." A 2008 study by Yi Quan of Kellogg School of Management showed that countries instituting patent protection on pharmaceuticals did not necessarily have an increase in domestic pharmaceutical innovation. Only countries with "higher levels of economic development, educational attainment, and economic freedom" showed an increase.

In law and economics, the Coase theorem () describes the economic efficiency of an economic allocation or outcome in the presence of externalities. The theorem states that if trade in an externality is possible and there are sufficiently low transaction costs, bargaining will lead to a Pareto efficient outcome regardless of the initial allocation of property. In practice, obstacles to bargaining or poorly defined property rights can prevent Coasean bargaining. This 'theorem' is commonly attributed to Nobel Memorial Prize in Economic Sciences winner Ronald Coase during his tenure at the London School of Economics, SUNY at Buffalo, University of Virginia, and University of Chicago.

Gruber further describes three additional issues with attempting to apply the Coase Theorem to real-world situations. The first of these is known as the assignment problem, and stems from the fact that for most situations with externalities, it is extremely difficult to determine who may be responsible for the externality as well as who is actually affected by it. Take the case of a polluted river that reduces the fish population. How can the involved parties determine which factories may have contributed the pollution that specifically harmed the fish, or whether there were any natural factors that interfered in the process.

Negative Externalities of Production Much of the time, private and social costs do not diverge from one another, but at times social costs may be either greater or less than private costs. When the marginal social cost of production is greater than that of the private cost function, there is a negative externality of production. Productive processes that result in pollution or other environmental waste are textbook examples of production that creates negative externalities. Such externalities are a result of firms externalizing their costs onto a third party in order to reduce their own total cost.

In many developing countries, mobile communications networks tend to experience a large network externality, which regulators and operators seek to correct by subsidising subscriptions through increased prices for call termination. That then allows the less-well off in that country to gain access to communications services, often for free (on a prepay tariff). The additional cost is then levied on subscribers who make calls to these new subscribers; the call originators tend to be better- off. Therefore, despite there being no direct transfer of money, there is a strong Robin Hood effect, with the better-off subsidising the less well-off.

In other words, in positional competitions, people work harder to compete and consume more than they would under optimal conditions. Some economists, such as Robert Frank, argue that positional goods create externalities and that "positional arms races" can result for goods that might boost one's social status relative to others. This phenomenon, Frank argues, is clearly bad for society, and thus government can improve social welfare by imposing a high luxury tax on certain luxury goods to correct for the externality and mitigate the posited social waste.• Robert H. Frank (2008). "consumption externalities," The New Palgrave Dictionary of Economics, 2nd Edition. Abstract. • _____ (1997).

To be the supply of public goods efficient, national public goods must be supplied at national level, local public goods at local level, etc. If the provision of national public goods is left to local communities, there would be a freerider problem and there can occur an undersupply of those goods. Similarly, there is likely to be an undersupply of international public goods, if they are provided by the national governments. However, it does not exist any highest level of the government, which stands above national governments, which would be given responsibility for resolving global externality problems.

It has been argued, for instance, that "diminishing returns to scale quickly lead to costs of animal confinement that overwhelm any benefits of CAFOs." These economists claim that CAFOs are at an unfair competitive advantage because they shift the costs of animal waste from CAFOs to the surrounding region (an unaccounted for "externality"). The evidence shows that CAFOs may be contributing to the drop in nearby property values. There are many reasons for the decrease in property values, such as loss of amenities, potential risk of water contamination, odors, air pollution, and other health related issues.

The deaths do not stop at commercial honeybees as there is evidence of significant pathogen spillover to other pollinators including wild bumble bees, infecting up to 35-100% of wild bees within 2 km radius of commercial pollination. The negative externality of private pollination services is the decline of biodiversity through the deaths of commercial and wild bees. The graph shows the average dollar amount per colonies received by beekeepers depending on the pollinated crop.Despite losing about a third of their workforce every year, beekeepers continue to rent out their bees to almond farms due to the high pay from the almond industry.

A more recent area in Martimort's research is the theory of public-private partnerships (PPPs). Together with Jerome Pouyet, Martimort analyzes whether the construction of public service infrastructure and the management of that infrastructure should be bundled or not, arguing that PPPs may be advantageous if there is a positive externality, the private benefits from asset ownership are not too large, and the risk of regulatory capture is limited.Martimort, D., Pouyet, J. (2008). To build or not to build: Normative and positive theories of public- private partnerships. International Journal of Industrial Organization, 26(2), pp. 393-411.

Research and development(R&D;) investments can also be made to improve the military capacity of production. It could then have positive impacts on other production fields. Moreover, more workers will be employed, which might reduce the unemployment rate, but this might also reduce their productive when they will return to a non-military sector of employment, or the unemployment rate could rise again dramatically when the military use will decrease. As a consequence, an increase of military expenditure can create a large variety of economic impacts and externalities, positives and/or negatives (see also: Externality).

This would include, for example, large parting bonuses for CEOs after a takeover or management buyout. Since corporate valuation is often subject to considerable uncertainty and ambiguity, and since it can be heavily influenced by asymmetric or inside information, some question the validity of MBOs and consider them to potentially represent a form of insider trading. The mere possibility of an MBO or a substantial parting bonus on sale may create perverse incentives that can reduce the efficiency of a wide range of firms-- even if they remain as public companies. This represents a substantial potential negative externality.

In the case of personal cars, feebates share some of the same aims as fuel taxes, vehicle registration fees, congestion charging, and road pricing. It is claimed feebates are generally a more efficient way of promoting greater fuel efficiency and other socially-desirable outcomes than traditional taxes or quotas. Fuel taxes create important price signals that can make consumers aware of the non-internalized costs of fuel consumption (greenhouse gasses, other pollution)—and raise funds to offset this externality. But retail consumers have very high discount rates, meaning buyers do not take into account the additional cost high gasoline taxes or poor gas mileage when purchasing a car.

In the 1990s, he wrote that "countries in North America and Europe should eliminate all tariffs and quotas (protectionist measures)". He now advises the eurozone countries to control their trade balance with Germany by means of export/import certificates or "trade chits" (a protectionist measure). Citing Keynesian theory, he explains that trade surpluses are harmful: "John Maynard Keynes pointed out that surpluses lead to weak global aggregate demand – countries running surpluses exert a "negative externality" on trading partners. Indeed, Keynes believed it was surplus countries, far more than those in deficit, that posed a threat to global prosperity; he went so far as to advocate a tax on surplus countries".

Supply curve with external benefits; when the market does not account for the additional social benefits of a good both the price for the good and the quantity produced are lower than the market could bear. The graph shows the effects of a positive or beneficial externality. For example, the industry supplying smallpox vaccinations is assumed to be selling in a competitive market. The marginal private benefit of getting the vaccination is less than the marginal social or public benefit by the amount of the external benefit (for example, society as a whole is increasingly protected from smallpox by each vaccination, including those who refuse to participate).

Since greenhouse gas emissions from the combustion of fossil fuels are closely related to the carbon content of the respective fuels, this negative externality can be compensated for by taxing the carbon content of fossil fuels at any point in the product cycle of the fuel. Carbon taxes are a type of Pigovian tax and help to address the problem of emitters of greenhouse gases not facing the full social cost of their actions. Research shows that carbon taxes effectively reduce greenhouse gas emissions. Economists generally argue that carbon taxes are the most efficient and effective way to curb climate change, with the least adverse effects on the economy.

The government can intervene in the market, using an emission tax for example to create a more efficient outcome; this Pigouvian tax is the optimal policy prescription for any aggregate, negative externality. Pigou describes as positive externalities, examples such as resources invested in private parks that improve the surrounding air, and scientific research from which discoveries of high practical utility often grow. Alternatively, he describes negative externalities, such as the factory that destroys a great part of the amenities of neighboring sites. In 1960, the economist Ronald H. Coase proposed an alternative scheme whereby negative externalities are dealt with through the appropriate assignment of property rights.

The legitimacy of a political order, he posits, relies exclusively on its compliance with these societal values and in its capacity to integrate and adapt to any change. Rigidity is, in other words, inadmissible. Johnson writes "to make a revolution is to accept violence for the purpose of causing the system to change; more exactly, it is the purposive implementation of a strategy of violence in order to effect a change in social structure". The aim of a revolution is to re-align a political order on new societal values introduced by an externality that the system itself has not been able to process.

Deadweight loss created by a binding price ceiling. The producer surplus always decreases, but the consumer surplus may or may not increase; however, the decrease in producer surplus must be greater than the increase, if any, in consumer surplus. Deadweight loss, also known as excess burden, is a measure of lost economic efficiency when the socially optimal quantity of a good or a service is not produced. Non-optimal production can be caused by monopoly pricing in the case of artificial scarcity, a positive or negative externality, a tax or subsidy, or a binding price ceiling or price floor such as a minimum wage.

Even if a measurement of the psychological effect of some externality did exist, it would be impossible to collect that data for all individuals affected and then find the optimum output level. Since it is not possible to find the optimum output level, it is not possible to find the optimum Pigovian tax level to achieve that optimum. In the end, Baumol argues that the best solution is to set a minimum standard of acceptability for negative externalities and create tax systems to achieve those minimum standards. Baumol points out that government committees have a tradition of agreeing on minimum standards, so the practicality of this solution is reasonable.

He thinks with Berkeley, that objects of sight are quite distinct from those of touch, and that the one therefore cannot give any assurance of the other; and he asks the Cartesians to consider how far God's truth and goodness are called in question by their denial of the externality of the secondary qualities. The second part of the book is taken up with a number of metaphysical arguments to prove the impossibility of an external world. The pivot of this part is the logical principle of contradiction. From the hypothesis of an external world a series of contradictions are deduced, such as that the world is both finite and infinite, is movable and immovable, &c.

Market failure occurs when an externality is present and a market will often either under-produce a product with a positive externalisation or overproduce a product that generates a negative externalisation. Air pollution is a negative externalisation that cannot be easily incorporated into markets as the world's air is not owned and then sold for use to polluters. So too much pollution could be emitted and people not involved in the production pay the cost of the pollution instead of the firm that initially emitted the air pollution. Critics of market failure theory such as Ronald Coase, Harold Demsetz and James M. Buchanan argue that government programs and policies also fall short of absolute perfection.

This is the ideal revenue brought in by ticketing as that is the price burden that will bring the socially optimal quantity. While this is ideal, this is very unlikely to happen through ticketing because, with ticketing, one must factor in the probability of someone receiving the ticket and multiple that probability by the price. The graph does not show this theoretical situation because the data of how often tickets are given for mobile phone use while driving is not conclusive. While ticketing can be tricky to apply, the revenue brought in by ticket is a benefit to society as it can be used for local and state needs and will help reduce the externality.

A living wage is meant to address these by providing the material basis that allows individuals a degree of autonomy and prevents disproportionate income and wealth that would inevitably lead to a societal fissure between the rich and poor. A living wage further allows for political participation by all classes of people which is required to prevent the political interests of the rich from undermining the needs of the poor. These arguments for a living wage, taken together, can be seen as necessary elements for 'social sustainability and cohesion'. Waiting for a living wage poster (1913) Donald Stabile argues for a living wage based on moral economic thought and its related themes of sustainability, capability and externality.

On the two great questions of miracles and inspiration he made great concessions to modern criticism and philosophy. His lifelong battle was on behalf of personal religious experience, in opposition to the externality of rationalism, orthodoxy or sacramentarianism. Karl Schwarz happily remarks that, as the English apologists of the 18th century were themselves infected with the poison of the deists whom they endeavoured to refute, so Tholuck absorbed some of the heresies of the rationalists whom he tried to overthrow. He was also one of the prominent members of the Evangelical Alliance, and few men were more widely known or more beloved throughout the Protestant churches of Europe and America than him.

Some proponents of redistribution argue that capitalism results in an externality that creates unequal wealth distribution.Marx, K. A. ,Contribution to the Critique of Political Economy. Progress Publishers, Moscow, 1977 Many economists have argued that wealth and income inequality are a cause of economic crises, and that reducing these inequalities is one way to prevent or ameliorate economic crises, with redistribution thus benefiting the economy overall. This view was associated with the underconsumptionism school in the 19th century, now considered an aspect of some schools of Keynesian economics; it has also been advanced, for different reasons, by Marxian economics. It was particularly advanced in the US in the 1920s by Waddill Catchings and William Trufant Foster.

A variety of factors can lead to missing markets: A classic example of a missing market is the case of an externality like pollution, where decision makers are not responsible for some of the consequences of their actions. When a factory discharges polluted water into a river, that pollution can hurt people who fish in or get their drinking water from the river downstream, but the factory owner may have no incentive to consider those consequences. Coordination failure can also prevent market formation. Again considering the pollution example, downstream residents might seek to be paid by the factory owner who pollute their water, but because of the free rider problem it may be difficult to coordinate.

He proposed a global bank that would issue its currency – the bancor – which was exchangeable with national currencies at fixed rates of exchange and would become the unit of account between nations, which means it would be used to measure a country's trade deficit or trade surplus. Every country would have an overdraft facility in its bancor account at the International Clearing Union. He pointed out that surpluses lead to weak global aggregate demand – countries running surpluses exert a "negative externality" on trading partners, and posed, far more than those in deficit, a threat to global prosperity. In his 1933 Yale Review article "National Self-Sufficiency," he already highlighted the problems created by free trade.

In the study of voter behavior, the efficient voter rule speaks to the desirability of voter-driven outcomes. It applies to situations involving negative externalities such as pollution and crime, and positive externalities such as education. Related efforts to achieve socially optimal quantities of externalities have long been a focus of microeconomic research, most famously by Ronald Coase and Arthur Pigou. Externality problems persist despite past remedies, which makes newer approaches such as the efficient voter rule important. In the context of negative externalities, the efficient voter rule states that when individuals who receive the same harm from a problem vote on whether to eliminate that problem at a uniform cost per individual, the outcome will be efficient, regardless of each individual’s contribution to the problem.

HEVs can be initially more expensive (the so-called "hybrid premium") than pure fossil-fuel-based ICE vehicles, due to extra batteries, more electronics and in some cases other design considerations (although battery renting can be used to reach the cost parity). The trade-off between higher initial cost (also called showroom costs) and lower fuel costs (difference often referred to as the payback period) is dependent on usage – miles traveled, or hours of operation, fuel costs, and in some cases, government subsidies. Traditional economy vehicles may result in a lower direct cost for many users (before consideration of any externality). Consumer Reports ran an article in April 2006 stating that HEVs would not pay for themselves over 5 years of ownership.

Beginning in the 1970s, a particularly visible strain of localism in the United States was a movement started by Alice Waters to buy locally produced products. This movement originated with organic farming and likely gained impetus because of growing dissatisfaction with organic certification and the failing economic model of industrial agriculture for small farmers. While the advocates of local consumption draw on protectionist arguments, they also appealed primarily to an environmental argument: that pollution caused by transporting goods was a major externality in a global economy, and one that "localvores" could greatly diminish. Also, environmental issues can be addressed when decision making power is held by those affected by the issues instead of power sources that do not understand the needs of local communities.

Internals were believed by Rotter (1966) to exhibit two essential characteristics: high achievement motivation and low outer- directedness. This was the basis of the locus-of-control scale proposed by Rotter in 1966, although it was based on Rotter's belief that locus of control is a single construct. Since 1970, Rotter's assumption of uni-dimensionality has been challenged, with Levenson (for example) arguing that different dimensions of locus of control (such as beliefs that events in one's life are self-determined, or organized by powerful others and are chance-based) must be separated. Weiner's early work in the 1970s suggested that orthogonal to the internality-externality dimension, differences should be considered between those who attribute to stable and those who attribute to unstable causes.

They note that some studies found that internal health locus of control is linked with increased exercise, but cite other studies which found a weak (or no) relationship between exercise behaviors (such as jogging) and internal health locus of control. A similar ambiguity is noted for data on the relationship between internal health locus of control and other health-related behaviors (such as breast self-examination, weight control and preventative- health behavior). Of particular interest are the data cited on the relationship between internal health locus of control and alcohol consumption. Norman and Bennett note that some studies that compared alcoholics with non- alcoholics suggest alcoholism is linked to increased externality for health locus of control; however, other studies have linked alcoholism with increased internality.

The rationale for governmental involvement in the environment is often attributed to market failure in the form of forces beyond the control of one person, including the free rider problem and the tragedy of the commons. An example of an externality is when a factory produces waste pollution which may be discharged into a river, ultimately contaminating water. The cost of such action is paid by society-at- large when they must clean the water before drinking it and is external to the costs of the polluter. The free rider problem occurs when the private marginal cost of taking action to protect the environment is greater than the private marginal benefit, but the social marginal cost is less than the social marginal benefit.

Cost- benefit integrated assessment models are the main tools for calculating the social cost of carbon, or the marginal social cost of emitting one more tonne of carbon (as carbon dioxide) into the atmosphere at any point in time. For instance, the DICE, PAGE, and FUND models have been used by the US Interagency Working Group to calculate the social cost of carbon and its results have been used for regulatory impact analysis. This type of modelling is carried out to find the total cost of climate impacts, which are generally considered a negative externality not captured by conventional markets. In order to correct such a market failure, for instance by using a carbon tax, the cost of emissions is required.

Several technical approaches have been proposed, but there has been no legal framework to date that has required satellite operators to clean up the negative externality of their derelict satellites. New approaches offer the technical prospect of markedly reducing the cost of object capture and deorbit with the implementation of a one-up/one-down launch license regime to Earth orbits, that would require satellite operators to remove one spacecraft for each one deployed. By October 2017, OneWeb had filed documents with the American Federal Communications Commission (FCC) stating their space debris mitigation plan. OneWeb "satellites are designed for mission lives of at least five years", and "the post-mission disposal operation is anticipated to take less than one year".

Herd immunity is often accounted for when conducting cost–benefit analyses of vaccination programs. It is regarded as a positive externality of high levels of immunity, producing an additional benefit of disease reduction that would not occur had no herd immunity been generated in the population. Therefore, herd immunity's inclusion in cost–benefit analyses results both in more favorable cost- effectiveness or cost–benefit ratios, and an increase in the number of disease cases averted by vaccination. Study designs done to estimate herd immunity's benefit include recording disease incidence in households with a vaccinated member, randomizing a population in a single geographic area to be vaccinated or not, and observing the incidence of disease before and after beginning a vaccination program.

In Dolan v. City of Tigard, the court added that an exaction is legitimate only if the public benefit from the exaction is roughly proportional to the burden imposed on the public by allowing the proposed land use—that is, that the exaction is not excessive to compensate for the externality the proposed land use would impose. This "rough proportionality" must be shown by an individualized determination, with the burden on the government to show its evidence. In Dolan, the court required compensation for an exaction that required donation of land for a public greenway and bike path, because a private greenway would have been sufficient and the City of Tigard was not specific enough about the benefits of the bike path.

A specific example of a negative cultural externality is the contention surrounding use of artificial snow at Arizona Snowbowl, a ski resort in Northern Arizona. Arizona Snowbowl is situated in the San Francisco peaks, which are one of the holiest sites for various Native American tribes in the Four Corners area, including the Navajo Nation. In 2004, Arizona Snowbowl was renting its slopes from the US Forest Service, and was looking to build new ski slopes and increase the production of artificial snow. The proposed project would involve the clearing of approximately 74 acres of forest, the use of reclaimed water to produce artificial snow, the construction of a three-acre holding pond for reclaimed water, and the installation of an underground pipeline.

In the early 1960s Pigou's analysis was criticised by Ronald Coase, who argued that taxes and subsidies are not necessary if the partners in the transaction can bargain over the transaction. The externality concept remains central to modern welfare economics and particularly to environmental economics. The Pigou Club, named in his honour, is an association of modern economists who support the idea of a carbon tax to address the problem of climate change. A neglected aspect of Pigou's work is his analysis of a range of labour-market phenomena studied by subsequent economists, including collective bargaining, wage rigidity, internal labour markets, segmented labour market, and human capital. Sticky wages are when workers’ earnings don’t adjust quickly to changes in labour market conditions.

A distinctive feature of a nightclub is also the fact that it can serve as a hub for substances like alcohol, which could affect third parties, creating a negative externality of consumption. The culture of nightclubs create a sense of consuming alcohol in larger quantities than usual. A study in São Paulo looking to identify causes of binge drinking found that environmental variables such as more number of dancefloors, higher level of noise, and ‘all you can drink’ services to be significantly linked to binge drinking. Furthermore, the culture created around nightclubs to indulge in ‘pre-drinking’ accentuates the amount of alcohol consumed, which leads to more problems in residential areas off nightclub premises (for example, a higher chance of participating in a fight).

For example, the Triple Bottom Line approach tends to take the economy as its primary point of focus with the domain of the environmental as the key externality. Secondly, the one-dimensional quantitative basis of many such methods means that they have limited purchase on complex qualitative issues. Thirdly, the size, scope and sheer number of indicators included within many such methods means that they are often unwieldy and resist effective implementation. Fourthly, the restricted focus of current indicator sets means that they do not work across different organizational and social settings—corporations and other institutions, cities, and communities.Liam Magee, Andy Scerri, Paul James, Lin Padgham, James Thom, Hepu Deng, Sarah Hickmott, and Felicity Cahill, ‘Reframing Sustainability Reporting: Towards an Engaged Approach’, Environment, Development and Sustainability, vol.

Or a firm emitting pollution will typically not take into account the costs that its pollution imposes on others. As a result, pollution may occur in excess of the 'socially efficient' level, which is the level that would exist if the market was required to account for the pollution. A classic definition influenced by Kenneth Arrow and James Meade is provided by Heller and Starrett (1976), who define an externality as "a situation in which the private economy lacks sufficient incentives to create a potential market in some good and the nonexistence of this market results in losses of Pareto efficiency".Heller, Walter P. and David A. Starrett (1976), On the Nature of Externalities, in: Lin, Stephen A.Y. (ed.), Theory and Measurement of Economic Externalities, Academic Press, New York, p.

This subsidy, taking the form of an externality, is of course paid for by society in the form of taxes. This thought is repeated by Grimshaw who argues that employers offset the social costs of maintaining their workforce through tax credits, housing, benefits and other wage subsidies. The issue was raised during the Democratic party primary election of 2016 in the United States, when presidential candidate Bernie Sanders mentioned that "struggling working families should not have to subsidise the wealthiest family in the country", and therefore, implied that the large retailer Walmart, who is owned by the wealthiest family in the country, was not paying fair wages and was being subsidised by taxpayers. Those in favor of living wage ordinances primarily research the negative impacts of insufficient minimum wages.

The problem in real life is that nobody knows ex ante the most valued use of a resource, and also that there exist costs involving the reallocation of resources by government. Another, more refined, normative conclusion also often discussed in law and economics is that government should create institutions that minimize transaction costs, so as to allow misallocations of resources to be corrected as cheaply as possible. When faced with an externality, the same efficient outcome can be reached without any government intervention as long as the following assumptions hold: # Property rights must be clearly defined # There must be little to no transactions costs # (Following 2.) There must be few affected parties (or else the transactions costs of organizing them gets to be too great). # There must be no wealth effects.

Another alternative to applying Pigovian taxation is for the government to place a limit on the total amount of the production of the output causing the negative externality and create a market for rights to generate that specific output. In the United States since the late 1970s, and in other developed nations since the 1980s, the concept of a market for "pollution rights" has emerged. Giving out the rights for free (or at less than market price) allows polluters to lose less profit or even gain profits (by selling their rights) relative to the unaltered market case. Goulder, Perry, and Burtraw suggest that selling permits to firms is the best option, but recognize that many firms in the status quo are grandfathered in, meaning they are given exemptions.

The plant is expected to emit est 36.8 million tonnes of CO2-equivalent per year once completed.Andreas Spath, "US To Finance Dirty Coal Power In South Africa" Care 2 Care, May 30, 2011. A 2011 report "The True Cost of Coal: The monstrous price of South Africa's coal addiction" by Greenpeace Africa and the University of Pretoria’s Business Enterprises calculated Kusile's climate change to water use, and impact on health,estimating that the damage caused will cost between R31.2 billion and R60.6 billion a year, and that 30% of Kusile’s externality cost would have been able to generate five times the power with renewable energy. In November 2011, Greenpeace activists chained themselves to a gate and climbed a crane, a few weeks before the country hosted a global conference on climate change.

In addition to the main report, they published eight different work streams paper, providing technical information and analysis for each finance source. Although the AGF Report did not build a blueprint for implementing these sources, it does assess all sources based on eight criteria, which includes revenue, efficiency (carbon efficiency - the impact of a method on setting a price for carbon externality and overall efficiency - taking into account impacts on developed country growth and risks, equity (distribution of revenue), incidence (who really pays for the climate change mitigation and adaptation actions - should avoid payment by developing countries or inclusion of developing countries’ contribution in counting towards 100billion, practicality (feasibility before 2020), reliability, additionality to Official Development Assistance and acceptability (domestic political acceptability in both developed and developing countries).

One of the early propositions on taxing capital (according to the broader neoclassical definition of "capital") was to capture the full rental value of land. Political economist and social reformer Henry George most notably championed the idea of a land value tax in Progress and Poverty, as a levy on the value of unimproved or natural aspects of the land, primarily location; it disregards the improvements such as buildings and irrigation. Land value taxation has no deadweight loss because the input of production being taxed (land) is fixed in supply; it cannot hide, shrink in value, or flee to other jurisdictions when taxed. Economic theory suggests that a pure land value tax which succeeds in avoiding taxation of improvements could actually have a negative deadweight loss (positive externality), due to productivity gains arising from efficient land use.

Ecological economics criticizes the concept of externality because there is not enough system thinking and integration of different sciences in the concept. Ecological economics is founded upon the view that the neoclassical economics (NCE) assumption that environmental and community costs and benefits are mutually cancelling "externalities" is not warranted. Joan Martinez Alier, for instance shows that the bulk of consumers are automatically excluded from having an impact upon the prices of commodities, as these consumers are future generations who have not been born yet. The assumptions behind future discounting, which assume that future goods will be cheaper than present goods, has been criticized by Fred PearcePearce, Fred "Blueprint for a Greener Economy" and by the Stern Report (although the Stern report itself does employ discounting and has been criticized for this and other reasons by ecological economists such as Clive Spash).

One measurement of greenhouse gas related and other Externality comparisons between energy sources can be found in the ExternE project by the Paul Scherrer Institut and the University of Stuttgart which was funded by the European Commission. According to that study, hydroelectric electricity produces the lowest CO2 emissions, wind produces the second-lowest, nuclear energy produces the third- lowest and solar photovoltaic produces the fourth-lowest. Similarly, the same research study (ExternE, Externalities of Energy), undertaken from 1995 to 2005 found that the cost of producing electricity from coal or oil would double over its present value, and the cost of electricity production from gas would increase by 30% if external costs such as damage to the environment and to human health, from the airborne particulate matter, nitrogen oxides, chromium VI and arsenic emissions produced by these sources, were taken into account.

In his early writings Bakhtin used the concepts of outsideness and the surplus to elucidate the necessary conditions for dialogical interaction. In one's view of the other there is a surplus of spatio-temporal objectivity necessitated by the very fact of its externality: "In order to understand it is immensely important for the person who understands to be located outside the object of his or her creative understanding—in time, in space, in culture... Our real exterior can be seen and understood only by other people because they are located outside us in space and because they are others".Bakhtin. Response to a question from the New World editors, quoted in Morson and Emerson (1990). p. 55 Only the outside perspective, never the person themselves, can see "the clear blue sky against whose background their suffering external image takes on meaning".

A general principle in liability doctrine is than an accident which would not have occurred except for the action or inaction of some person or entity contrary to a duty such as the exercise of proper care was the result of negligence. The liability space from which one can recover is typically, themselves, other parties, or nobody. See Official Reports Opinions Online Jurisdictional exceptions permitting one to legally take "assurance" that the distance will be clear beyond the proximate edge of clear visibility and choose such a speed accordingly, transfers classic common law liability from that driver for his or her "blind" actions. This duty to assure clear distance ahead is inevitably transferred, as an externality to everybody or thing else who must instead warn the driver, such as the government, its road engineers, and maintainers.

Water is an externality, regarded as given by nature or God. This leads to a situation where those (countries, regions or farms) who use most of the available water, benefit the most, but do not pay for it, leaving others (living downstream) with less and polluted water. Whereas in most debates about accountability for water use, privatization is seen as the enemy of the people dependent on the water, many NGOs in this (former Soviet) region claim instead that the source of the water-related problems lies in the irresponsible use of water, mainly by the agricultural sector (which is still predominantly owned by the state). Many claim that this can only be changed by changing the soviet paradigm, namely by putting a price tag on water: the more water one uses and/or pollutes, the more one should pay.

A revenue-neutral carbon tax might be best for the Turkish economy; without a carbon tax or emissions trading, the country could be vulnerable to carbon tariffs imposed by the EU, the UK or other export partners. Turkey received the most EU climate-change financing by far in 2018; the EBRD is investing in, and have offered to support, an equitable transition from coal. In 2015, less than half of Turkey's carbon emissions from energy use were priced. Taxes meet the social cost of road-transport carbon (not, however, the social cost of the country's air pollution), but all other sectors have a large gap between the actual tax ( per tonne of CO2 in 2018) and the tax with this negative externality; the actual cost of most greenhouse gas emissions is not borne by the emitters, violating the polluter pays principle.

What concerns it, therefore, is no longer the act of positing itself, but the specific determinateness of that which is posited, since it is this and nothing else that establishes its externality in the first place. : EXAMPLE: Hegel offers for comparison with his notion of External Reflection the "reflective judgement" of Kant, which, in the Critique of Judgement, is described as the faculty of the mind that determines the universals that lie behind immediately given particulars. This action is similar to that of External Reflection with the crucial difference that, for Hegel, the universal does not simply lie "behind" the particular, but generates the particular from itself and so is the particular's own true Essence. The immediate particular upon which Kant's judgement works is, in actuality, simply a nothingness posited by Reflection itself solely in order to generate its equally null universal, Essence.

One particular supersynchronous orbital regime of significant economic value to Earth commerce is a band of near-circular Geocentric orbits beyond the Geosynchronous belt—with perigee altitude above , approximately above synchronous altitude —called the geo graveyard belt. The geo graveyard belt orbital regime is valuable as a storage and disposal location for derelict satellite space debris after their useful economic life is completed as geosynchronous communication satellites. Artificial satellites are left in space because the economic cost of removing the debris would be high, and current public policy does not require nor incentivize rapid removal by the party that first inserted the debris in outer space and thus created a negative externality for others—a placing of the cost onto them. One public policy proposal to deal with growing space debris is a "one-up/one-down" launch license policy for Earth orbits.

When externalities are generated, such as the noxious fumes in our example, the full social costs aren't accounted for, meaning the price will be set too low, and the quantity consumed will be greater than the socially optimal level, as at point Qp. A Pigouvian tax is set equal to the value of the externality so that prices rise to reflect the full costs of production, and demand decreases to Qs, demonstrated by the supply curve's shift to the left. One effective method of tackling externalities is through government intervention, with the imposition of environmental or 'green' taxes. Take, for example, a plant which emits noxious fumes in the process of smelting copper. These fumes cause health issues for individuals who live in the plant's vicinity, to the sum of x dollars per ton of copper output.

Of course, the parties themselves would care who was granted the rights initially because this allocation would impact their wealth, but the end result of who broadcasts would not change because the parties would trade to the outcome that was overall most efficient. This counterintuitive insight—that the initial imposition of legal entitlement is irrelevant because the parties will eventually reach the same result—is Coase’s invariance thesis. Coase's main point, clarified in his article 'The Problem of Social Cost,' published in 1960 and cited when he was awarded the Nobel Prize in 1991, was that transaction costs, however, could not be neglected, and therefore, the initial allocation of property rights often mattered. As a result, one normative conclusion sometimes drawn from the Coase theorem is that liability should initially be assigned to the actors for whom avoiding the costs associated with the externality problem are the lowest.

The graph shows the number of honeybee colonies in the U.S. from 1982-2015, While there are 200,000 - 350,000 different species of animals that help pollination, bees are responsible for majority of the pollination for consumed crops, providing between $235 and $577 US billion of benefits to global food production. Since the early 1900s, beekeepers in the United States started renting out their colonies to farmers to increase the farmer's crop yields, earning additional revenue from providing privatized pollination. As of 2016, 41% of an average US beekeeper's revenue comes from providing such pollination service to farmers, making it the biggest proportion of their income, with the rest coming from sales of honey, beeswax, government subsidy, etc. This is an example of how a positive externality, pollination of crops from beekeeping and honey-making, was successfully accounted for and incorporated into the overall market for agriculture.

Command and control regulation is not considered an economic instrument as it is typically enforced by narrower means such as stop or control order, though it may include an administrative monetary penalty in site-specific regulations. The instrumental distinction between a tax and a command-and-control regulation is determined by the enacted legislative names, and whether they contain "tax" as a defined term within the Act, for example British Columbia's Carbon Tax Act versus Alberta's Specified Gas Emitters Regulation, Alta Reg 139/2007 A carbon tax is also an indirect tax—a tax on a transaction—as opposed to a direct tax, which taxes income. A carbon tax is called a price instrument, since it sets a price for carbon dioxide emissions. In economic theory, pollution is considered a negative externality, a negative effect on a third party not directly involved in a transaction, and is a type of market failure.

Though fake news can generate some utility for consumers, in terms of confirming far-right beliefs and spreading propaganda in favor of a presidential candidate, it also imposes private and social costs. For example, one social cost to consumer is the spread of disinformation which can make it harder for consumers to seek out the truth and, in the case of the 2016 Election, for consumers to choose an electoral candidate. Summarized by a Congressional Research Service Study in 2017, > “Cyber tools were also used [by Russia] to create psychological effects in > the American population. The likely collateral effects of these activities > include compromising the fidelity of information, sowing discord and doubt > in the American public about the validity of intelligence community reports, > and prompting questions about the democratic process itself.” The marginal social cost of fake news is exponential, as the first article is shared it can affect a small number of people, but as the article is circulated more throughout Facebook, the negative externality multiplies.

In the case of positional goods, people benefiting from a positional good do not take into account the externalities of their respective sufferers. That is, in the case of "public ... goods, the consequences of this failure implies that an agent consuming the public good does not get paid for other people's consumption; in the case of a positional ... good, the equivalent failure implies that an agent consuming positive amounts is not charged for the negative consumption of other agent's consumption" (Pagano 1999:71). That is, while, in the case of public goods, we have the standard underinvestment problem in their supply, because excluding individuals from externalities that have the "same sign" may turn out to be impossible, by contrast, in the case of positional goods, we have a problem of over-provision, because all agents may try to consume positive amounts of these goods, neglecting to consider the externality on others. For public goods, an undersupply, for positional goods, it signifies an over-supply.

This is the first and foremost function of a security interest: to elevate the creditor's place in the insolvency queue. A second function of security is to allow the creditor to trace the value in an asset through different people, should the property be wrongfully disposed of. Third, security assists independent, out- of-court enforcement for debt repayment (subject to the statutory moratorium on insolvency), and so provides a lever against which the secured lender can push for control's over the company's management.See PL Davies, Gower and Davies Principles of Modern Company Law (8th edn Sweet and Maxwell 2009) 1161 However, given the adverse distributional impact between creditors, the economic effect of secured lending is a negative externality against non- adjusting creditors.See LA Bebchuk and JM Fried, ‘The Uneasy Case for the Priority of Secured Claims in Bankruptcy’ (1996) 105 Yale Law Journal 857–934 With an ostensibly private contract between a secured lender and a company, assets that would be available to other creditors are diminished without their consent and without them being privy to the bargain.

Political factors such as lobbying of government by polluters may also tend to reduce the level of the tax levied, which will tend to reduce the mitigating effect of the tax; lobbying of government by special interests who calculate the negative utility of the externality higher than others may also tend to increase the level of the tax levied, which will tend to result in a sub-optimal level of production. Political factors can result in complementary problems when pollution opponents assert irrationally high levels of harm or operate from a hidden agenda of extirpating the polluting agent regardless of the prospects for regulating it to cause minimal harm; regulators are then driven to set absurdly high tax levels, possibly high enough to effectively prohibit operation. Similarly, lobbyists whose agendas are entirely orthogonal to pollution reduction per se might intervene with regulators to drive tax rates higher or lower, thus preventing optimal operation of the tax. Likely instances of such include organizations intending to lower the polluter's market value as part of a pending plan to buy out its parent entity.

The method began with a fundamental dissatisfaction with current approaches to sustainability and sustainable development, which tended to treat economics as the core domain and ecology as an externality. Two concurrent developments provided impetus: a major project in Porto Alegre, and a United Nations’ paper called Accounting for Sustainability, Briefing Paper, No. 1, 2008. The researchers developed a method and an integrated set of tools for assessing and monitoring issues of sustainability while providing guidance for project development.Stephanie McCarthy, Paul James and Carolines Bayliss, eds, Sustainable Cities, Vol. 1, United Nations Global Compact, Cities Programme, New York and Melbourne, 2010, 134pp. The method was then further refined through projects in Melbourne and Milwaukee, and through an ARC-funded cross-disciplinary project‘Semantic Technologies to Help Machines Understand Us: Fuji Xerox leads RMIT to $1.4m Grant for Real-Time Green Reports’, IT Business, 30 October 2009. Mary-Lou Considine, ‘UN-RMIT Relationship Tackles Problems in the Pacific’, Ecos Magazine, August–September 2009, p. 150. that partnered with various organizations including Microsoft Australia, Fuji Xerox Australia, the City of Melbourne, World Vision, UN-Habitat and most crucially Metropolis.Andy Scerri and Paul James, ‘Communities of Citizens and “Indicators” of Sustainability’, Community Development Journal, vol.