Externalities
/ɛksˌtɜrnˈælɪtiz/
Definitions
- (n.) Costs or benefits of economic activities that affect third parties and are not reflected in market prices.
The factory's pollution created externalities that harmed nearby residents.
Forms
- externalities
- externality
Related terms
See also
Commentary
In legal contexts, externalities often underpin regulations addressing environmental harm or public health issues, illustrating market failure where private incentives diverge from social costs or benefits.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.