After learning so much about externalities in class lately, I've realized that probably the majority of things we do and choices we make can be classified as either a positive or negative externality. I've even started noticing how my actions could be categorized and I've become more conscious of what I do and how it affects others. The other day, for example, I took my dog for a walk. While on the walk, my dog had to go to the bathroom and I cleaned up after him so I wouldn't step in it. This served as a positive externality because after I cleaned up after my dog, no one else had to run the risk of stepping in it or even smelling it when they passed that spot either, so what I did to help myself helped others as well. On the opposite end, I was guilty of producing a negative externality while driving to dance last week. I had to have my hair up in a tight bun for the ballet class I was going to, and I hadn't had time to do my hair before I left my house, so I decided to do it in the car. So, I worked on my hair at stoplights, and therefore wasn't paying complete attention when the light turned green. Since it took me a few moments longer to notice when the light changed, the cars behind me had to wait until I saw the light and started accelerating. Although it was beneficial to me to get my hair done, it was inconvenient for the cars who were forced to wait for me. Thinking about this now, I feel really bad for creating a negative externality like that. Learning about an economic concept like that has made me give more consideration to my actions and try harder to not inconvenience others with my own actions.
Tuesday, September 24, 2013
Positive and Negative Externalities
After learning so much about externalities in class lately, I've realized that probably the majority of things we do and choices we make can be classified as either a positive or negative externality. I've even started noticing how my actions could be categorized and I've become more conscious of what I do and how it affects others. The other day, for example, I took my dog for a walk. While on the walk, my dog had to go to the bathroom and I cleaned up after him so I wouldn't step in it. This served as a positive externality because after I cleaned up after my dog, no one else had to run the risk of stepping in it or even smelling it when they passed that spot either, so what I did to help myself helped others as well. On the opposite end, I was guilty of producing a negative externality while driving to dance last week. I had to have my hair up in a tight bun for the ballet class I was going to, and I hadn't had time to do my hair before I left my house, so I decided to do it in the car. So, I worked on my hair at stoplights, and therefore wasn't paying complete attention when the light turned green. Since it took me a few moments longer to notice when the light changed, the cars behind me had to wait until I saw the light and started accelerating. Although it was beneficial to me to get my hair done, it was inconvenient for the cars who were forced to wait for me. Thinking about this now, I feel really bad for creating a negative externality like that. Learning about an economic concept like that has made me give more consideration to my actions and try harder to not inconvenience others with my own actions.
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Rachel, good application of the idea. The dog waste is actually a negative externality. The government corrects the negative externality by forcing dog owners to clean up or face a fine. If there were no penalties, would you clean it up?
ReplyDeleteI think everyone who has been in a car can relate to your stoplight scenario. It's a very clever way to think about negative externalities. Almost every day people are putting on makeup, changing CD's, or even texting in their cars which can all be considered negative externalities because they spillover into other aspects of life. Your example really helps me remember how externailities affect others!
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