Introduction to Positive and Negative Externalities

What you’ll learn to do: define and give examples of positive and negative externalities

Image of a deflated gold balloon with the text "Congrats Grad!". In the near background are trees and rose bushes. In the far background is the United States of America capitol congress building.

Figure 1. What does society gain from investing in the education of another student? While not always easy to measure, recent studies suggest the positive externalities to education typically include better health outcomes for the population, lower levels of crime, a cleaner environment and a more stable, democratic government.

In this section, you will explore in detail the spillover effects of positive and negative externalities. These include positive effects like improved technologies or negative effects like pollution.