Focusing on the rancher, for example, we could characterize a rancher who chooses to allow his cattle to roam as imposing a negative externality
on the farmer in the form of destroyed crops.
The paternalistic argument, of course, is that the present self imposes a negative externality
on the future self by discounting too heavily the long-term consequences of consuming "calorie-dense" fast food or sugary beverages.
One implication of this result is that policymakers should recognize the power of voluntary negotiations to overcome negative externality
problems, even in the absence of government intervention.
that Continental would suffer a negative externality
Similarly, projects in which the private returns are high, but social returns are negative, are best addressed with private investment, but with government taxation of the negative externality
to equate public and private returns.
ante distortive effects than in the negative externality
For example, if there is a negative externality
from segregation, it may be optimal to have a harsher penalty for a hate crime committed against a black family living in an otherwise all-white neighborhood than for an otherwise-identical hate crime committed against a black family living in a black neighborhood, in order to provide better incentives for integrating neighborhoods.
Is this not a case of negative externality
in production in all sectors of the economy, which causes market failure?
A negative externality
of a health education program to reduce smoking via increasing taxation may be that, although overall consumption may decline, the remaining smokers may smoke more of the cigarette than before and thus increase their risk due to increased exposure to carcinogens at the lower end of the cigarette.
They tend to overexploit consumers' attention (4), and thus produce a negative externality
In other words, there is an unpriced negative externality
to the actions of market participants.
of Carbon Emissions Is Difficult to Valuate