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Parent Node(s):
EXTERNALITY
An externality is a consequence not considered in
analysis. An externality that affects the interests of other
groups of people or other decision makers is referred to as a
spillover. If the effects of an externality are appreciable, it
may have to be taken into account (internalized) in the analysis.
The term externality derives from economics, where externalities
are costs or benefits not taken into account in a transaction or
system of transactions. For example, the cost borne by others
when an industry pollutes a stream would be referred to as an
externality. (IIASA)
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