What Is Negative Externality?

Negative externality, also known as external cost or external diseconomy, refers to the phenomenon that one person's behavior or enterprise's behavior affects other people or enterprises and pays extra costs, but the latter cannot obtain corresponding compensation. Or costs to third parties other than the parties to the transaction that are not reflected in the price.

Negative externality

English comparison: negative externalities; negative exterior;

1. For the various uncivilized phenomena on the street, taking targeted measures and detailed management according to the different conditions, causes and characteristics of each region is indeed a governance idea worth looking forward to. On the other hand, it is also necessary for the general public to consciously control the "negative externalities" of their behaviors.

The so-called "externality" refers to the impact of the activities of the subject on others and society. It has a positive impact on others and society and is called "positive externality", otherwise it is "negative externality". For example, walking the dog without restraint, leaving shit on the grass, etc. are "negative externalities."

Consciously strictly controlling the "negative externalities" of behaviors, this requires that the general public, while facilitating themselves and realizing their own interests, must always pay attention to the possible adverse effects of their behaviors on others and society, and try to reduce this impact. To the lowest. For example, when walking a dog, as a civilized citizen, you should put a rope on the dog, wear a mouth cover, and carry tools to collect possible feces. When setting up a stall, you should follow the relevant plans and requirements; spit, throw When garbage is found, it is necessary to wait for the trash can before spitting and throwing away ... so as not to harm the legitimate rights and interests of others when it meets its own interests and needs.

Car exhaust has negative externalities because it generates smoke that other people have to inhale. The government is working to solve this problem by setting car emissions standards. The government also levies taxes on gasoline to reduce the number of times people drive.

Barking dogs cause negative externalities because neighbors are disturbed by noise. Dog owners do not bear the full cost of noise, so little care is taken to prevent their dogs from barking. Local governments address this by making "interference calm" illegal

In short, to create a national civilized city, we hope that more and more citizens can consciously control the "negative externalities" of behaviors-although the development of such good habits requires a certain degree of external regulation. However, as long as we can refine the management and strictly enforce the law, we can also effectively strengthen the relevant education and guidance, and the public can understand. Not to mention, as

There is only one fundamental way to resolve negative externalities, which is to unify the use and use of public resources. Specifically, there are three methods.

the first. In the case of multiple uses and methods of use, the parties to the use compromise each other until the minimum level at which they can accept each other. However, the premise of this method is that the purposes and usage methods of the two can be compatible. For example, some people play music in the same space, and some people want to read books. If the two can be compromised, the person who plays the music can turn down the volume, or the music that the person who reads can accept, the two can coexist. However, this solution can only be carried out with a small number of members. If there are many members, the transaction costs between them will be large.

second. Replace the subject. When there are multiple public resources of the same conditions, all parties using the same use method can be placed under the same public resource, or there is only one use and use method in a dedicated place, and it cannot be used for other purposes. Take the example of sewage and fish farming. One special pond can be specified for fish farming and another for sewage disposal. This is not exactly the same as privatization of property rights.

third. Specify the use and mode of use under certain conditions. In other words, the purpose and mode of use of the public resource are specified, and there can be only one use under certain conditions. For example, cars in congested sections of the road drive according to the number of single and double periods. However, the disadvantage of this method is that all uses will bring negative externalities. If one cannot bring negative externalities, it will bring unfairness to the other. This is the case with music and reading. Reading doesn't hinder people who play music, but concerts have an effect on people who read books.