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

Total economic value of environment, Normal 0 false false f...

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

Judiciary and pollution control, Normal 0 false false false...

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

GDP as a social welfare function, What are the properties and limitations o...

What are the properties and limitations of GDP as a social welfare function?

Economics of Health Care, Deductibles and copayments are two common incenti...

Deductibles and copayments are two common incentive tools in insurance. (a)Explain which informational problems each tool primarily addresses. (b) If only one had to be used, indic

Public speaking, which fallacies best diiscribe this statement The restaura...

which fallacies best diiscribe this statement The restaurant in new is either buddy''s bistro or Clyde emporium

Economics, three basic economics difference between them and definations

three basic economics difference between them and definations

Iso-14001 certification, Normal 0 false false false EN-...

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

Budget, what is the difference between budget deficit and fiscal deficit

what is the difference between budget deficit and fiscal deficit

Inflation vary from a cost-push inflation, Describe the basic process by wh...

Describe the basic process by which an economy moves by a business cycle.  What is meant by a demand-pull inflation?  How does a demand-pull inflation vary from a cost-push inflati

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