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

Complexity and the policy process, There has been a long history of researc...

There has been a long history of research on ‘the policy process' which is ‘closely connected to efforts to examine the nature of power in society and to specify the necessary cond

Production possibility frontier, with the aid of labelled production possib...

with the aid of labelled production possibilty frontier explain the concept of opportunity cost

Basic national accounts identities, Normal 0 false false fa...

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

Value of a product or service, Question: (i) There are certain benchma...

Question: (i) There are certain benchmarks for measuring the success of infomercials" what are those benchmarks in relation to the value of a product or service? (ii) It i

Policy implementation , Your organisation has tasked your to reduce the rat...

Your organisation has tasked your to reduce the rate of a particular type of incident or particular type of high risk hazards which is commonly occurring. Your task requires you to

Stabilization policy, The monetarist and fiscal controversy is still on. Th...

The monetarist and fiscal controversy is still on. The recent history of the U.S. looks like a success story of the monetarists; but besides pure luck, it involved strong element o

What is rational policy, Question 1: " Public policy gives one a better...

Question 1: " Public policy gives one a better understanding of what governments do, why they do what they do and what difference public policy makes to the lives and circumst

Economics, three basic economics difference between them and definations

three basic economics difference between them and definations

Aspects of environmental functions, Normal 0 false false fa...

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

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