and Negative Externalities Week 2 Discussion 1
The Government monitors and regulates
businesses in both the public and private sectors, to ensure they are complying
with Federal, State and local rules and regulations. The result of these regulations
can be referred to as positive or negative externalities.
Provide an example of positive and negative externalities in the police
(public) sector. What kind of impact can these externalities have on a budget
and the people responsible for creating the budget?
Mikesell, J. (2011). Fiscal administration,
analysis and applications for the public sector (8th ed.). Boston, MA:
(2009). What's a crime prevention officer worth? Sheriff,
61(6), 18-19. Document ID: 1871741921.
An externality is referred to as a benefit or a
cost that emerges from an activity and it has an effect on a third party who
did not choose to incur the cost or benefit for example the society. In general
terms they are the costs and benefits that are linked with the production or
consumption of a good or service. Externalities can either be positive or
negative based on the nature of the effect on the third party. Externalities
that are negative cause too much of a product to be produced while positive externalities
too little products to be produced.
Public goods are those that are hard to prevent
people from benefiting from such as clean water, national defense, clean air,
law enforcement and many others. These are examples of positive externalities.
In many circumstances negative externalities occur (Lavenex & Uçarer, 2003).
Examples of Externalities are as follows
Immunizations, such as a flu
shot, etc., offer a positive externality to third parties in that it aids in preventing
the spread of illness to the general public. A company offers funds for its
employees to acquire expert training. By doing so, the company can be benefited
by improved production which also assists the customer. Moreover, this can
benefit the society as large by advancing the level of education as well as the
quality of life. Improving driving habits will decrease the risk of accident
for everyone on the road as well as eventually reduce insurance premiums of the
of crime is always there. But, a community’s degree of involvement with law
enforcement activities can make all the difference. The role of citizens is essential in preventing crime is “important since they
may alert authorities, provide evidence, and denounce offenders” (Ferrer, 2008,
A major example of negative externalities is pollution. The
producer and consumer normally finance the goods produced while the society
incurs the cost of pollution that is introduced into the environment as a
product is being manufactured and this is what makes it a negative
externality. Raising the amount of coal
burned to cause electricity hence raises the level of pollutants released into
the atmosphere that can lead to things such as global warming, acid rain and
smog. These externalities have an impact on the budget as well as the people
creating the budget since the costs and have to be internalized. The market has
to spend additional funds in order to compensate for damages that will be
incurred hence there will be an impact on the budget (Papandreou, 1998).
Negative effect occurs when the rate of community involvement is
lower than the crime rate”
Negative externality Sleep
deprivation in police officers. This can have a huge effect on the dissions a
police officer makes.
Lavenex, S., & Uçarer, E. M. (2003). Migration
and the externalities of European integration. Lanham, Md. [u.a.: Lexington
Ferrer, R. (2008, October). [PDF] Breaking the
law when others do: A model of law ... Retrieved from
www.econ.upf.edu/.../Rosa%20Ferrer%20BTLWOD%20Revised%20version. pdf - Similar
A. A. (1998). Externality and institutions. Oxford: Clarendon Press.
Not sure if I am on the right track
with this and can’t think of a Negative Externalities regarding
police. make any changes you feel necesary thanks