the.com/externality
the bill someone else pays for your good time
means A cost or benefit from an economic activity that lands on someone who wasn't part of the deal — like pollution from a factory, or the pleasant scent from a neighbor's bakery.
from Built from 'external' plus the noun-making '-ity.' 'External' descends from Latin 'externus' (outward, foreign), from 'exter' (on the outside) — itself rooted in 'ex,' meaning 'out of.' The economic sense was popularized in the early 20th century by economists studying the side effects markets fail to price; the word literally names a cost pushed 'outside' the transaction.
- coined by
- economist Arthur Pigou in 1920
- the fix
- taxes that force the cost back home
- can go positive
- your bees pollinate the neighbor's orchard free
- climate cost
- called the greatest market failure ever seen
- Coase twist
- clear property rights can erase it entirely
flint water crisis — lead contamination affecting 99,000+ residents from 2014-present due to cost-cutting pipe decisions
deepwater horizon oil spill — 2010 bp rig explosion released 4.9 million barrels into gulf of mexico, harming fishing and tourism industries