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Topic: Positive externalities

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Economy of the Philippines

	Externality - Wikipedia, the free encyclopedia
		From the perspective of anybody affected by the externality, it is either a negative factor in their lives, as with pollution by the factory (or the wearer), or a boon, such as the pleasant smell of those wearing the perfume (in the opinion of some).
		Positive externalities are frequently associated with the free rider problem.
		A side effect or externality associated with his activity is the pollination of surrounding crops by the bees.
	en.wikipedia.org /wiki/Externality (2834 words)

	Externalities, Propery Rights and Pollution
		Externalities, also know as spillovers or neighborhood effects, are any costs or benefits of production and exchange that are not taken into account by those who create the costs or benefits.
		Examples of positive externalities include the benefits to passersby of a beautiful garden on a busy street, or the safer neighborhood for others that results from some residents hiring private security patrols.
		Externalities, both positive and negative, persist in situations where property rights are poorly defined or are unsecured.
	www.fte.org /teachers/lessons/efl/efllesson6.htm (1081 words)

	Externalities
		An externality occurs when an economic agent’s consumption or production activities confer a benefit or impose a cost on other actors, and this benefit is conferred or this cost is imposed outside of a market.
		A consumption externality is an externality generated by the consumption behavior of an economic actor.
		A provision externality is a dynamic externality, and it is that together our animals impose a cost on the future provision of the good produced in the commons, that is we can cause environmental damage through overgrazing.
	faculty.maxwell.syr.edu /jomcpeak/lecture12.htm (1573 words)

	Externalities
		An example of a positive externality might be that by individuals consuming vaccine against the influenza virus, those who do not vaccinate themselves receive the benefit of a reduced prevalence of the virus in the community.
		When it comes to a positive externality in production the damming of rivers for electricity is a good example as the damming not only provides for flood mitigation for those living downstream of the river but also provides an area for enjoying water based recreational activities.
		The most common approach to solving the problem of externalities, especially pollution, is the imposition of regulatory limits on the amount of the externality produced and the imposition of fines on those parties who produce externalities beyond the regulated limit.
	www2.hunterlink.net.au /~ddhrg/econ/ext1.html (2675 words)

	[No title] (Site not responding. Last check: 2007-10-10)
		Positive externalities are not adequately produced because the cost to the producer is not matched by the returns, at lest in a direct sense, which makes the production of “public goods” (a kind of positive externalities) not economically feasible.
		Of course, unknown externalities will go unresolved in any system of exchange though these ought not to be of concern just as unknown facts should not influence decision-making.
		We may not be in a position to correct this state of affairs at present but it is conceivable that we will be.
	www.unc.edu /~rileyj/writing/unc-ch_phil067_essay2_ownership.doc (1705 words)

	A Further Complication - The Positive Externality of the Internet
		Figure 13a represents the case where the positive externality is greater than the negative externality whilst Figure 13b represents the reverse situation.
		The determination of the optimal congestion toll is thus complicated by the possible presence of positive externalities to usage.
		If the positive externality of usage is found to outweigh the costs of congestion then the appropriate response is to subsidise usage.
	users.hunterlink.net.au /~ddhrg/econ/honours/positive_ext.html (628 words)

	Why Higher Taxes Can Be Good For The Economy
		You hear about positive externalities all the time too - every time you read something like "the new theatre/museum/colloseum is expected to bring 200 million a year to the local economy" that's a positive externality.
		A positive externality a profit that the entity (government, corporation or person) providing a service or good does not receive themselves.
		Combined with seeking out and reducing negative externalities and promoting positive externalities, a decent and progressive tax rate is key to a prosperous economy.
	agonist.org /node/34241/print (875 words)

	Prof. Bryan Caplan
		Negative externalities are also often called "public bads," especially when the externalities are large relative to demand (so the socially optimal quantity is close to zero).
		Positive externalities are the other side of the coin.
		Positive externalities are also often called "public goods," especially when the externalities are large relative to demand (so the equilibrium quantity is close to zero).
	www.gmu.edu /departments/economics/bcaplan/e370/IO4.htm (2195 words)

	CHAPTER NINE
		An externality is the effect of an economic activity felt by those not directly involved in the economic activity.
		Externalities can be both positive and negative, but, according to Ricardo, externalities are often more negative, and consequently, it is the negative externalities that capture our attention.
		Positive externalities are often described as spillover effects to suggest their effects are felt by consumers who were not directly intended by their producers.
	www.auburn.edu /~gadzeat/public-goods.htm (2812 words)

	5. Alleviating the environmental impact of agricultural water development
		Consideration of all the positive externalities of agriculture is not readily possible.
		There are cases where the same phenomenon may be positive in certain circumstances and negative in others, or it may be valued positively by some observers and negatively by others.
		Moreover, positive externalities are often ignored whereas negative ones tend to be reported widely.
	www.fao.org /DOCREP/006/Y4525E/y4525e08.htm (2651 words)

	Gottheil SG Externalities, Market Failure, and Public Choice
		An example of a positive externality is your dorm neighbors playing the same music (assuming you like AC/DC and Metallica) when you are in a mood to have fun, not sleep.
		Positive externalities are benefits that third parties enjoy without having to pay.
		In cases of positive externalities, the role for government is to encourage more of an activity to be undertaken.
	www.swlearning.com /economics/gottheil/externalities_market.html (1076 words)

	Imperfections and Distortions Defined (Site not responding. Last check: 2007-10-10)
		Externalities represent economic actions which have effects external to the market in which the action is taken.
		The external effects can be beneficial to others (positive externalities) or detrimental to others (negative externalities).
		Typically because the external effects occur to someone other than the producer or consumer, they do not take the effects into account when they make their production or consumption decision.
	internationalecon.com /v1.0/ch100/100c020.html (1880 words)

	Public Goods and Externalities, by Tyler Cowen: The Concise Encyclopedia of Economics: Library of Economics and Liberty
		Externalities occur when one person's actions affect another person's well-being and the relevant costs and benefits are not reflected in market prices.
		(Note that the free-rider problem and positive externalities are two sides of the same coin.) A negative externality arises when one person's actions harm another.
		Policy debates usually focus on free-rider and externalities problems, which are considered more serious problems than nonrivalrous consumption.
	www.econlib.org /library/Enc/PublicGoodsandExternalities.html (1393 words)

	Ch (Site not responding. Last check: 2007-10-10)
		In the case of an externality, the market solution is inefficient (price and quantity are distorted and either too high or too low).
		Coase concludes that if these three assumptions hold, it doesn't matter whether we ask the producer of the externality to pay, or ask the person experiencing the externality to pay, the outcome will be the same.
		In the case of a positive externality, we have the opposite result.
	www.sonoma.edu /users/o/olmstedj/econ201b/ch21 (1103 words)

	Chapter Notes
		An externality is "the impact of one person's actions on the well-being of a bystander".
		The reason externalities produce a quantity traded that is NOT socially optimal is that externalities involve some UNMEASURED cost or benefit in the marketplace.
		If there is a positive externality, the government could opt for a subsidy instead (a subsidy is just the opposite of a tax - if you have to pay a tax in order to do something, then the government pays YOU a subsidy every time you do something).
	www.lclark.edu /~bekar/Mankiw/ch10/notes.htm (1386 words)

	Worksheet on Positive Externalities
		Positive externalities are the benefits accruing to third parties, that is, to parties other than those involved in the original transaction.
		Firms and consumers will only tend to take account of private costs and benefits in their actions and so the external costs or benefits will be ignored.
		To identify the benefits of measles inoculations, we are going to investigate the incidence of measles and compare it to the percentage of the population inoculated against the disease.
	www.bized.co.uk /learn/economics/marketfail/characteristics/externalities/positive.htm (750 words)

	Externalities
		This is an ironic solution in a way, because many environmentalists and ecologists have argued that the existence of externalities proves that a market system is seriously flawed and should be scrapped for an alternative, generally with greater state ownership and control.
		The implication of Coase's work is that externalities should not be a serious small-group problem because if only a very few people are involved they can usually organize and seek legal remedies.
		When there are externality problems in the market, we can call on the government as an outside agent to solve them.
	www.ingrimayne.com /econ/resouceProblems/FreeRes2.html (1605 words)

	Tutor2u - what are positive externalities?
		Positive externalities exist when the marginal social benefit of production and or consumption exceeds the marginal private benefit i.e.
		Good quality health care brings positive spillover effects both for the recipient of the care but also their families and associates.
		As a society we should be encouraging people to increase their consumption of health care services.
	www.tutor2u.net /economics/content/topics/externalities/positive_externalities.htm (550 words)

	OnTheCommons.org \| An Economic Theory of the Commons (Site not responding. Last check: 2007-10-10)
		The problem with relying on the market is that potential positive externalities may remain unrealized if they cannot be easily valued and appropriated by those that produce them, even though society as a whole may be better off if those potential externalities were actually produced.
		“Positive externalities” are precisely those “goods” that benefit all of us, as commoners — clean air, access to information, an open Internet, functioning ecosystems.
		By looking at “infrastructure” through the lens of the commons, however, we can begin to appreciate the positive, non-market externalities that a resource actually generates — and begin to design public policies to protect these benefits on their own merits.
	onthecommons.org /node/613 (721 words)

	[No title]
		AM20 \ B \\ Internalization of Externalities \ 2 \\ Efficient internalization of an externality occurs when, for the activity that generates the externality: (a) private profit is maximized.
		AM20 \ B \\ Internalization of Externalities \ 2 \\ Internalizing all costs that were previously external to a polluting industry and its customers causes: (a) both output and the cost of the product to rise.
		AM20 \ B \\ Externalities and Large Number Bargaining \ 3 \\ Systems of property rights and private bargaining to efficiently resolve negative externalities are least likely to be effective if: (a) government allows offsets and the bubble concept.
	www.unc.edu /depts/econ/byrns_web/EC101/TB_Principles/MC1/M1-20.doc (1966 words)

	Externality
		An externality is something that, while it does not monetarily affect the producer of a good, does influence the standard of living of society as a whole.
		A positive externality is something that benefits society, but in such a way that the producer cannot fully profit from the gains made.
		A negative externality is something that costs the producer nothing, but is costly to society in general.
	library.thinkquest.org /26026/Economics/externality.html (591 words)

	[No title]
		An externality is a cost or benefit that arises from production and falls on someone other than the producer, or a cost or benefit that arises from consumption and falls on someone other than the consumer.
		An external cost of production is a cost that is not borne by the producer but is borne by others.
		Marginal external cost is the cost of producing one more unit of a good or service that falls on people other than the producer.
	staffwww.fullcoll.edu /aturner/ch18.doc (2356 words)

	Chapter 10
		Negative externalities in production or consumption sometimes lead markets to produce a larger quantity than is socially desirable.
		Positive externalities in production or consumption sometimes lead markets to produce a smaller quantity than is socially desirable.
		Positive externalities: results in market equilibrium short of social optimum.
	www.personal.kent.edu /~mqi/prin/Chap10.htm (712 words)

	[No title]
		implementing a subsidy on goods with a positive externality.¡,’qrró¨"Private Solutions to Externalities¨L Government action is not always needed to solve a problem of externalities.¡M’ " Mó¨"Private Solutions to Externalities¨/Coase Theorem: If private parties can bargain to their mutual advantage without cost, then the private market may solve the problem of externalities and allocate resources efficiently.
		Private bargaining can internalize the external effects, resulting in efficient solutions (bargaining with a neighbor)¡D’q! !ª+ó¨%Failure to Private Solutions Approach¨Sometimes the private solution approach will fail because: The transaction costs (bargaining costs) can be so high that private agreement is not possible.
		Pigovian Taxes: designed to reflect the social costs of a negative externality and internalize the external cost to the offending entity.
	www.westga.edu /~dboldt/ECON2105/CHAP10.PPT (1468 words)

	SSRN-Why Enable Litigation?: A Positive Externalities Theory of the Small Claims Class Action by William Rubenstein (Site not responding. Last check: 2007-10-10)
		The fact that parties will not pursue these claims is, I argue, an example of the underproduction of a so-called public good.
		Litigation can be conceptualized as a public good, with its pursuit producing positive externalities.
		Rubenstein, William B., "Why Enable Litigation?: A Positive Externalities Theory of the Small Claims Class Action".
	papers.ssrn.com /sol3/papers.cfm?abstract_id=890303 (357 words)

	[No title] (Site not responding. Last check: 2007-10-10)
		People affected by the externality could therefore pay producers and consumers anything greater than 0 to convince them not to produce/consume the last unit.
		Notice that the efficient quantity involves positive amounts of the externality.
		Summary: Correcting Externalities with Taxes on Polluters We have seen that we can restore the efficient quantity in the presence of a negative production externality if we impose a tax on the polluter equal to the MEC at the efficient quantity.
	web.uvic.ca /~egugl/indexpf_files/externalities.doc (727 words)

	Prof
		Positive externalities are the other side of the coin. Positive externalities are beneficial side effects that selfish agents don't factor into their decisions.
		Must include both positive and negative externalities in your calculations. (Important case: "pecuniary externalities").
		Thus, as the economist Ronald Coase argued, many externalities problems can be solved by defining property rights, then allowing parties to bargain. So long as "transactions costs" are low, externalities won't be a problem.
	www.gmu.edu /departments/economics/bcaplan/e103/micro10.htm (590 words)

	Measuring Positive Externalities from Unobservable Victim Precaution: An Empirical Analysis of Lojack
		Unobservable precautions, on the other hand, may provide positive externalities since criminals cannot determine a priori who is protected.
		We find that the presence of Lojack is associated with a sharp fall in auto theft in central cities and a more modest decline in the remainder of the state.
		"Measuring Positive Externalities From Unobservable Victim Precaution: An Empirical Analysis Of Lojack," The Quarterly Journal of Economics, MIT Press, vol.
	ideas.repec.org /p/nbr/nberwo/5928.html (1058 words)

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