C1nounformalbusinessacademic
US/ˌek.stərˈnæl.ə.ti/
UK/ˌek.stəˈnæl.ə.ti/
a cost or benefit of an activity that falls on other people, not on those who do it
In context
Pollution from the factory is a negative externality for nearby residents.
Economists argue that a tax can force firms to pay for externalities.
Education creates a positive externality because society gains from a skilled workforce.
Words that go with externality
adjective + noun
- negative externalityTraffic noise is a negative externality of the new airport.
- positive externalityVaccination has a positive externality for the whole community.
- environmental externalityThe price ignores every environmental externality.
noun + preposition
- externality of productionWaste is an externality of production.
verb + noun
- create an externalityCheap fuel can create an externality for city air.