social costs


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Related to social costs: External costs, Social benefits

social costs

the COSTS borne by society resulting from the actions of FIRMS. Consider, for example, a river that is used by both a chemical firm to dispose of its waste and by a town as a source of drinking water. Assume that the continuous dumping of waste causes the river to become polluted. The firm incurs PRIVATE COSTS in producing chemicals but pays out nothing for the use of the river or the POLLUTION caused. The town, by contrast, is forced to install special water-treatment plants to counter the pollution. Thus, the extra cost of cleaning up the river is not borne by the firm but by society

One way to remedy this divergence of private and social costs is to tax the firm an amount equivalent to the costs of treating the pollution. Making the firm pay the full costs of supplying chemicals has the merit of encouraging it to look around for the least costly way of disposing of its waste; that is, instead of dumping its waste in the river it might be cheaper for the firm to invest in a waste disposal plant. See also MARKET FAILURE, EXTERNALITIES, WELFARE ECONOMICS, COST-BENEFITS ANALYSIS, POLLUTER PAYS PRINCIPLE.

References in periodicals archive ?
Using a lower estimate for the social cost of carbon could allow the administration to undermine a range of environmental regulations by exaggerating the compliance costs compared to the societal benefits of reduced carbon emissions.
Acknowledging that austerity measures and economic reforms could have heavy social costs, Draghi said that they could however reduce injustices such as widespread youth unemployment.
The social costs of a transaction equals the sum of the resource costs incurred by the different parties, whether for labor, capital, or raw materials.
The focal argument is that marginal social benefits, at equilibrium, must strictly exceed marginal social cost, at equilibrium, in order to correct for historical failures and expected cumulative environmental disturbances away from the optimum social extraction path.
Feeding the oscillating initiation function described above into the compartmental model of drug use produces modest fluctuations in overall drug use prevalence but steady growth in drug-related social costs.
There is a way to restructure our economies so as to reflect true environmental and social costs.
Economists, following Pigou whose work has dominated thought in this area, have consequently been engaged in attempt to explain why there were divergences between private and social costs and what should be done about it, using a theory in which private and social costs were necessarily always equal.
In the prior SOMEBODIES AND NOBODIES the author identified 'rankism' as a form of workplace abuse: his ALL RISE: SOMEBODIES, NOBODIES AND THE POLITICS OF DIGNITY continues the subject, exploring the personal, professional and social costs of rankism and providing strategies for change.
The notion of having prices and user charges reflect marginal social costs in transportation has been around for many years.
The chapter on social costs has very serious problems.
Born Losers is a must read for anyone interested in American identity formation, the expansion of capitalism as political-economy and article of faith, the construction of economic striving as a moral imperative, and the psychological and social costs of a national ideology centered on self-reliance and economic ambition as the hallmarks of a successful life.
Attribute figures to climate change, the social costs (health, environment, quality of life), energy dependency, etc.