Aug 10, 2025 · What Is an Externality? An externality occurs when an activity by one party causes a cost or benefit to another party. These effects can be either negative or positive.

The concept of externality was first developed by Alfred Marshall in the 1890s [1] and achieved broader attention in the works of economist Arthur Pigou in the 1920s. [2] The prototypical …

Externalities occur when producing or consuming a good cause an impact on third parties not directly related to the transaction. Externalities can either be positive or negative. They can …

Some argue that wealth itself has an externality: inflaming envy. Others maintain that there are externalities of altruism—when I give money to help the poor, everyone else who cares about …

What is an Externality? An externality is a cost or benefit of an economic activity experienced by an unrelated third party. The external cost or benefit is not reflected in the final cost or benefit …

1 day ago · What Is an Externality? An externality is a cost or benefit that is caused by one party but financially incurred or received by another. Externalities can be negative or positive. A …

May 28, 2025 · An externality is an unintended side effect of economic activity that impacts someone not directly involved in the transaction. Think of it as a spillover effect where …

Consumption, production, and investment decisions of individuals, households, and firms often affect people not directly involved in the transactions. Sometimes these indirect effects are …

Externalities are positive or negative indirect outcomes caused by production or consumption activities. Every day, millions of production and consumption activities are taking place. The …

Jun 17, 2025 · An externality is a cost or benefit that arises from the production or consumption of a good or service that affects third parties, either positively or negatively, without being …