The choice to emphasize either the positive or negative externality
in the mirrored set shapes the array of policy prescriptions we are likely to consider.
The intellectual underpinnings for the expansion of selective taxation of sin goods and other disfavored goods are built on a welfare economics argument--namely, that penalizing buyers and thereby controlling a negative externality
will help to limit the production of these public "bads.
Criticisms of the viability of bargaining solutions within a Coasean framework, especially in addressing negative externality
problems such as pollution, have been numerous.
the target plus the expected negative externality
that it would suffer
To provide one example, traffic congestion is a negative externality
in which one person's decision to drive harms others.
In other words, the study also suggests that where formal institutions are weak, activities having negative externality
could be curtailed through informal institutions such as social norms and peer effect.
Any contract that adversely affects children could be characterized as inflicting a negative externality
the activity that produces the negative externality
atmosphere, this could be perceived as a negative externality
Third, efforts by potential targets to avoid being victims of hate crime may generate a negative externality
Limiting insurance coverage through deductibles, or selling "at-fault" insurance, can partially internalize this negative externality
and thus improve individual and social welfare.
For example, a negative externality
of a power plant that is otherwise producing a useful good (electricity) is the air pollution it generates.
Finally, they consider alternatives to the present governance of sport, addressing whether sport should be seen as a public good or a private good, as well as doping as a negative externality
of the sporting spectacle.
If non-obese individuals truly pay some of the higher health care costs of the obese, the best solution would be to correct this negative externality
through imposing surcharges on health insurance premiums of the obese.
Given that foreclosed properties generally sell at a discount, a natural question arises as to whether these distressed properties, in turn, put downward sales price pressure on nearby properties, resulting in a negative externality