Externality

In economics, some decisions affect third parties. These parties can be affected by the decision positively or negatively, but this influence is involuntary. Th…

Externality
Air pollution is an externality

In economics, some decisions affect third parties. These parties can be affected by the decision positively or negatively, but this influence is involuntary. This is known as an externality, or an external effect. The problem with externalities is that no one pays for the cost of these effects. Usually, they are not part of the decision process. Externalities are often a form of market failure. In many cases, actors like states need to become active.

An example of an externality is pollution. One way to solve this is to introduce taxes on the goods that cause the pollution, for example carbon dioxide, which is the one of the causes of global warming. With concepts such as emissions trading, these externalities can again become part of the market system (and are no longer external).


Content Disclaimer

Informasi ini disarikan dari Wikipedia dan disajikan kembali untuk tujuan edukasi. Konten tersedia di bawah lisensi CC BY-SA 3.0. Kami tidak bertanggung jawab atas ketidakakuratan data yang bersumber dari kontribusi publik tersebut.

  1. The information displayed on this website is sourced in part or in whole from Wikipedia and has been adapted for the purpose of restating it. We strive to provide accurate and relevant information, however:
  2. There is no guarantee of absolute accuracy. Wikipedia is an open, collaborative project that can be edited by anyone, so information is subject to change.
  3. It is not intended to constitute professional advice. The content displayed is for informational and educational purposes only. For important decisions (e.g., medical, legal, or financial), please consult a professional.
  4. Content copyright. Wikipedia is licensed under the Creative Commons Attribution-ShareAlike License (CC BY-SA). This means that content may be reused with appropriate attribution and shared under a similar license.
  5. Responsible use. Any risk arising from the use of information from this website is entirely the responsibility of the user.