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→Externalities: grammar
===Externalities===
===Externalities===
An [[externality]] is an economic side-effect - the effects of an economic activity has on others, which is not captured in the price of the activity <ref>http://www.dictionaryofeconomics.com/article?id=pde2008_E000200&q=externality</ref>.
An [[externality]] is an economic side-effect - the effects of an economic activity on others, which are not captured in the price of the activity <ref>http://www.dictionaryofeconomics.com/article?id=pde2008_E000200&q=externality</ref>.
A widely used example of an externality is [[pollution]]: pollution is an unavoidable byproduct in many industries, and in the absence of regulation, most polluting firms will do little, if anything, to control their pollution, because abating pollution often incurs costs and reduces [[profit]]s. But pollution can have detrimental effects on local, regional, and even world populations and ecosystems, so the cost to society of pollution is usually nontrivial and this societal cost is not something that the firm pays. Pollution is an example of a ''negative externality'', but there are also ''positive externalities''. An example of a positive externality is when a homeowner invests time and money to beautify his or her yard to increase the property value; the values of neighboring properties will increase because the neighborhood is a nicer place to live.
A widely used example of an externality is [[pollution]]: pollution is an unavoidable byproduct in many industries, and in the absence of regulation, most polluting firms will do little, if anything, to control their pollution, because abating pollution often incurs costs and reduces [[profit]]s. But pollution can have detrimental effects on local, regional, and even world populations and ecosystems, so the cost to society of pollution is usually nontrivial and this societal cost is not something that the firm pays. Pollution is an example of a ''negative externality'', but there are also ''positive externalities''. An example of a positive externality is when a homeowner invests time and money to beautify his or her yard to increase the property value; the values of neighboring properties will increase because the neighborhood is a nicer place to live.