Classification of externality, Public Economics

Assignment Help:

Classification of Externality

Keeping in view the nature of the problem, externality may be classified into four broad types:

  1. Relevant externality- when the unconcerned parties are affected by an activity and the parties in turn demand for suitable solution to reduce its effect;
  2. Pareto relevant externality - in the process of appropriate solution to the problem, affected parties are made better off without adversely affecting any one;
  3. Static and dynamic externalities - in a static situation, a group overexploits the natural resource by imposing externality on others (for example, over-fishing), while in a dynamic case, the exploitation would be on such natural resource which has high future value (for example, fishing of juvenile fish species); and
  4. Pecuniary externality - an activity which imposes higher price or lower cost on people or land (location of huge business, industry in a particular area).

The disposal of public bad under normal course is done in various forms through natural resources media like air, water and land by treating earth as a natural sink. In the process of disposal, if the pollution load of public bad exceeds the assimilative capacity of the natural resource, it will impose serious problem by impairing the ecological balance. Hence, the main issue is how to abate pollution to the required level in order to keep both living and non-living organisms in good health and prosperity.

 


Related Discussions:- Classification of externality

Agenda setting, Explain the stages and various coordination mechanism nvolv...

Explain the stages and various coordination mechanism nvolved in policy processes

Privatisation, Ask quedoes privatisation decentralise economic power stion ...

Ask quedoes privatisation decentralise economic power stion #Minimum 100 words accepted#

Theory of environmental policy, Normal 0 false false false ...

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Indifference curve, eiplain why indifference curve are convex to the origin...

eiplain why indifference curve are convex to the origin

Case for improving upon the market system -pigovian analysis, Case for Impr...

Case for Improving upon the Market System   Unlike the "optimistic followers"  of the "classical school" who believed  that markets  would  "natural!yn  or "automatically" prod

Pareto Optimality, Consider an economy in which George and Harriet consume ...

Consider an economy in which George and Harriet consume only ale and bread

Affirmative action and anticorruption programme, A change in the legal stat...

A change in the legal statute may be able to force an equilibrium if it leads to a new equilibrium which implies some revised belief which sustains the equilibrium. Tirole (1996)

Tr and tc curves explain-open-access optimum, Explain the following: (Cr...

Explain the following: (Critically Depensated) Growth Function                         Sustainable Yield Functions                         Logistic Growth Function

Sttages and various coordination mechanisms involved, stages and various co...

stages and various coordination mechanisms involved in policy processes..

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd