Externality

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Related to External costs: social costs, private costs, Positive externality, External Benefits

Externality

The cost or benefits of a transaction to parties who do not directly participate in it. Externality can be either positive or negative. For example, a merger can lead to higher share prices and bonuses for employees, benefiting shareholders and employees at the two companies merging, This can create wealth and positively impact a community. On the other hand, the merger can drive a competitor out of business, which results in layoffs and reduced wealth, which can hurt a community. Externality is also called spillover or the neighborhood effect. See also: External benefit, External cost.
References in periodicals archive ?
In this test, we attempted to analyze how the container cargoes would shift among different transport modes in Korea and how much total external costs would be changed if the government formulates more eco-friendly policies internalizing the external cost and levying taxes onto carriers.
If it were only necessary to adjust for the market failures of nuclear energy to decide its future role, then the additional external costs of $7.
In addition, it is noticeable that an increasing number of countries make certain efforts towards internalization and reduction of external costs of emissions through the introduction of taxes based on C[O.
From a Pigouvian perspective, a gas tax of 27 cents per gallon would account for the $35 billion in external costs from the average vehicle weight gain since 1988.
The National Academy of Sciences was charged by Congress to "define and evaluate the health, environmental, security, and infra-structural external costs and benefits that are not or may not be fully incorporated into the market price of energy [or] into the federal tax or fee.
Determining the financial value of external costs is difficult, but, nevertheless, some entities are trying to approach these costs as part of their environmental accounting system.
From the National Research Council's Committee on Health, Environmental, and Other External Costs and Benefits of Energy Production and Consumption, this study reports on the external costs and benefits associated with energy production, distribution, and use related to health, environment, security, and infrastructure, but are not reflected in market prices and usually not taken into account during decision making.
However, the corporate finance literature has typically focused on the relationship between the external costs and the investment levels of individual firms.
The internalisation of external costs means making such effects part of the decision-making process of transport users.
In fact, the market's failure to value external costs and benefits helped lead the banks to hold so much subprime debt in the first place.
External costs appear when certain social and economic activity affects the part of the society which is not related with this activity and when this impact and caused consequences are not compensated.
8 million in external costs associated with our clinical trials, primarily related to the two Phase 2 trials for AV650, and $1.

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