(economics, countable) An impact, positive or negative, on any party not involved in a given economic transaction or act.
Used in a Sentence
externality
Definitions, parts of speech, synonyms, and sentence examples for externality.
Editorial note
A negative externality means that somebody else bears part of the resource's cost, and a positive externality means that somebody else reaps part of its reward.
Examples16
Definitions3
Parts of speech1
Quick take
(economics, countable) An impact, positive or negative, on any party not involved in a given economic transaction or act.
Meaning at a glance
The clearest senses and uses of externality gathered in one view.
(countable) A thing that is external relative to something else.
(uncountable) The state of being external or externalized.
Definitions
Core meanings and parts of speech for externality.
noun
(economics, countable) An impact, positive or negative, on any party not involved in a given economic transaction or act.
noun
(countable) A thing that is external relative to something else.
noun
(uncountable) The state of being external or externalized.
Example sentences
A negative externality means that somebody else bears part of the resource's cost, and a positive externality means that somebody else reaps part of its reward.
Tragedy of the Commons just requires sufficient negative externality; depletable shared resource is an example of a source of such externality, but not the only form it can take.
The problem quickly devolves into an argument over the difference between a legitimate externality and an unwarranted intrusion.
A secondary interesting externality of the recent focus on patient satisfaction is the construction of parking near hospitals.
A lot of them get released into the ether as externality vapors, like productivity or ideas for new technology.
Sure but then every analysis is flawed because everything has some kind of externality that's hard to measure and account for.
Sorry guys, you ran an artificial market, took out loans against that artificial market, and an externality came and popped your bubble.
Because your average business today doesn't seem to give a shit about truth (see: almost everyone's marketing), fairness (especially to employees), goodwill (externality?
That's one of the clearest examples of externality you will ever see.
This particular externality is huge when you think about how investment works.
With proper governance (ie: laws) we can remove the market externality that exists in the natural monopoly of telecom infrastructure.
Just for future reference, you are using the term externality incorrectly.
Quote examples
Advertising is most certainly a "negative externality." Its cost is not fully borne by the firm, but rather imposed on intermediaries and externals.
In short, the negative positional externality is often compensated by the public goods of infant industry effects and research and development." The negative externality view of positional goods seems to be a minority opinion among economists.
And then the Patent Office profits by awarding patents putting the negative externality burden on those in the field of the patent to "fix" mistakes.
If you see the phrase positive externality and think to yourself, "Oh, that's good!"—then I hope I can help you see things differently.
Frequently asked questions
Short answers drawn from the clearest meanings and examples for this word.
How do you use externality in a sentence?
A negative externality means that somebody else bears part of the resource's cost, and a positive externality means that somebody else reaps part of its reward.
What does externality mean?
(economics, countable) An impact, positive or negative, on any party not involved in a given economic transaction or act.
What part of speech is externality?
externality is commonly used as noun.