Comments on: Can YOU think of a good example of a positive externality of production? http://welkerswikinomics.com/blog/2008/01/10/can-you-think-of-a-good-example-of-a-positive-externality-of-production/ for students and teachers of Economics Thu, 09 Feb 2012 09:13:55 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: John Doe http://welkerswikinomics.com/blog/2008/01/10/can-you-think-of-a-good-example-of-a-positive-externality-of-production/comment-page-1/#comment-15854 John Doe Tue, 06 Sep 2011 07:56:50 +0000 http://welkerswikinomics.com/blog/2007/09/09/can-you-think-of-a-good-example-of-a-positive-externality-of-production/#comment-15854 I think a large number of responses have failed to recognise that a positive externality in production refers to a positive benefit on a NON-CONSENTING THIRD PARTY (i.e. this cannot be the consumer or producer) that results from the ACT OF PRODUCING A GOOD by a supplier. As for which examples do not fufil this criteria I leave you to decide. And I don't think there is anything wrong (in an economic sense anyway) with the example of farmers who produce crops that reduce CO2 in the environment. This is an effect on third-parties (because it is a positive benefit to anyone who doesn't like greenhouse gases like CO2, not just the farmer or his customers, although whether CO2 is a significant cause of global warming is questionable), and also arises from the act of producing the good. (Whether his customers purchase his crops and consume them, the farmer's act of producing the goods in itself causes CO2 reduction.) Angela Liu's example, although possibly somewhat insignificant, is a novel one for me. I think a large number of responses have failed to recognise that a positive externality in production refers to a positive benefit on a NON-CONSENTING THIRD PARTY (i.e. this cannot be the consumer or producer) that results from the ACT OF PRODUCING A GOOD by a supplier. As for which examples do not fufil this criteria I leave you to decide.

And I don't think there is anything wrong (in an economic sense anyway) with the example of farmers who produce crops that reduce CO2 in the environment. This is an effect on third-parties (because it is a positive benefit to anyone who doesn't like greenhouse gases like CO2, not just the farmer or his customers, although whether CO2 is a significant cause of global warming is questionable), and also arises from the act of producing the good. (Whether his customers purchase his crops and consume them, the farmer's act of producing the goods in itself causes CO2 reduction.)

Angela Liu's example, although possibly somewhat insignificant, is a novel one for me.

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]]> By: Free software and externalities « GNUosphere http://welkerswikinomics.com/blog/2008/01/10/can-you-think-of-a-good-example-of-a-positive-externality-of-production/comment-page-1/#comment-9779 Free software and externalities « GNUosphere Thu, 14 Jan 2010 08:51:23 +0000 http://welkerswikinomics.com/blog/2007/09/09/can-you-think-of-a-good-example-of-a-positive-externality-of-production/#comment-9779 [...] to a beneficial spillover effect for the rest of society’s producers. I came across an older post by Jason Welker where he speaks of the difficulty in providing examples. In that post he quotes economics professor [...] [...] to a beneficial spillover effect for the rest of society’s producers. I came across an older post by Jason Welker where he speaks of the difficulty in providing examples. In that post he quotes economics professor [...]

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]]> By: Ben Ziegler http://welkerswikinomics.com/blog/2008/01/10/can-you-think-of-a-good-example-of-a-positive-externality-of-production/comment-page-1/#comment-5089 Ben Ziegler Sun, 11 May 2008 07:24:51 +0000 http://welkerswikinomics.com/blog/2007/09/09/can-you-think-of-a-good-example-of-a-positive-externality-of-production/#comment-5089 Recreation centers like bowling alleys, arcades, pool halls, etc are in the business of producing fun. As they produce fun, and teenagers consume it, it creates a positive externality because teenagers who might otherwise be bored out on the street, getting into trouble now have something more entertaining to do. The recreation centers are compensated for the fun they provide, but they aren't compensated for the decreased strain on the police force or the peace of mind they provide for parents who know where their kids are and exactly what they're doing. Recreation centers like bowling alleys, arcades, pool halls, etc are in the business of producing fun. As they produce fun, and teenagers consume it, it creates a positive externality because teenagers who might otherwise be bored out on the street, getting into trouble now have something more entertaining to do. The recreation centers are compensated for the fun they provide, but they aren't compensated for the decreased strain on the police force or the peace of mind they provide for parents who know where their kids are and exactly what they're doing.

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]]> By: Hansen Gu http://welkerswikinomics.com/blog/2008/01/10/can-you-think-of-a-good-example-of-a-positive-externality-of-production/comment-page-1/#comment-3806 Hansen Gu Mon, 21 Jan 2008 23:11:56 +0000 http://welkerswikinomics.com/blog/2007/09/09/can-you-think-of-a-good-example-of-a-positive-externality-of-production/#comment-3806 I'm with Kevin. I think that a sports team is able to bring about a sense of unity to a region. I think producers do try to capture this spillover in the forms of memorabilia or team products. I'm with Kevin. I think that a sports team is able to bring about a sense of unity to a region. I think producers do try to capture this spillover in the forms of memorabilia or team products.

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]]> By: Michael Daily http://welkerswikinomics.com/blog/2008/01/10/can-you-think-of-a-good-example-of-a-positive-externality-of-production/comment-page-1/#comment-3794 Michael Daily Mon, 21 Jan 2008 20:16:00 +0000 http://welkerswikinomics.com/blog/2007/09/09/can-you-think-of-a-good-example-of-a-positive-externality-of-production/#comment-3794 Basically it sounds like every public good is a positive externality of production. I don't know if this is truly the case, but based on the examples given it sure sounds like all the public goods people don't pay for can be considered positive externalities of production. The only problem with this I think is that it is not the production people are benefiting from with public goods, it's the end product of the production so that does not really count. It would only count in a situation where while it is being produced someone else is benefiting such as while as the example Sharon pointed out, where as a baker is baking the aroma from his or her food can be enjoyed. This also is only a rather minimal benefit, but I guess it could still be considered a positive externality. Basically it sounds like every public good is a positive externality of production. I don't know if this is truly the case, but based on the examples given it sure sounds like all the public goods people don't pay for can be considered positive externalities of production. The only problem with this I think is that it is not the production people are benefiting from with public goods, it's the end product of the production so that does not really count. It would only count in a situation where while it is being produced someone else is benefiting such as while as the example Sharon pointed out, where as a baker is baking the aroma from his or her food can be enjoyed. This also is only a rather minimal benefit, but I guess it could still be considered a positive externality.

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]]> By: Annie Sung http://welkerswikinomics.com/blog/2008/01/10/can-you-think-of-a-good-example-of-a-positive-externality-of-production/comment-page-1/#comment-3778 Annie Sung Mon, 21 Jan 2008 16:52:38 +0000 http://welkerswikinomics.com/blog/2007/09/09/can-you-think-of-a-good-example-of-a-positive-externality-of-production/#comment-3778 What about improving health care? Some countries provide free health care for their citizens (to an extent), and an improvement on this aspect would lead to a healthier population and a higher standard of living. I suppose this is where vaccinations come into play...less disease, better citizens. What about improving health care? Some countries provide free health care for their citizens (to an extent), and an improvement on this aspect would lead to a healthier population and a higher standard of living. I suppose this is where vaccinations come into play…less disease, better citizens.

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]]> By: James Tsao http://welkerswikinomics.com/blog/2008/01/10/can-you-think-of-a-good-example-of-a-positive-externality-of-production/comment-page-1/#comment-3752 James Tsao Sun, 20 Jan 2008 18:03:13 +0000 http://welkerswikinomics.com/blog/2007/09/09/can-you-think-of-a-good-example-of-a-positive-externality-of-production/#comment-3752 How about..people who plant trees to provide lumber for construction? What they are trying to sell is the lumber and their profit depends on it but in the process of obtaining that lumber... the growth of the trees remove certain amounts of greenhouse gases in the atmosphere How about..people who plant trees to provide lumber for construction? What they are trying to sell is the lumber and their profit depends on it but in the process of obtaining that lumber… the growth of the trees remove certain amounts of greenhouse gases in the atmosphere

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]]> By: Sharon Li http://welkerswikinomics.com/blog/2008/01/10/can-you-think-of-a-good-example-of-a-positive-externality-of-production/comment-page-1/#comment-3744 Sharon Li Sun, 20 Jan 2008 15:59:07 +0000 http://welkerswikinomics.com/blog/2007/09/09/can-you-think-of-a-good-example-of-a-positive-externality-of-production/#comment-3744 I'm not sure if this is right but I was thinking maybe bakeries make positive production externalities. When cakes and other baked goods are produced, they produce delicious-smelling aromas and they look pretty on display. I'm not sure if this is right but I was thinking maybe bakeries make positive production externalities. When cakes and other baked goods are produced, they produce delicious-smelling aromas and they look pretty on display.

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]]> By: kevin ma http://welkerswikinomics.com/blog/2008/01/10/can-you-think-of-a-good-example-of-a-positive-externality-of-production/comment-page-1/#comment-3705 kevin ma Thu, 17 Jan 2008 22:02:25 +0000 http://welkerswikinomics.com/blog/2007/09/09/can-you-think-of-a-good-example-of-a-positive-externality-of-production/#comment-3705 Would the production of dams be a positive production externality? The purpose of it is to produce electricity and prevent water mitigration for the people that live downstream of the river. However, it also provides an area for people to play water activities since the water flow is weakened by the dam. Would the production of dams be a positive production externality? The purpose of it is to produce electricity and prevent water mitigration for the people that live downstream of the river. However, it also provides an area for people to play water activities since the water flow is weakened by the dam.

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]]> By: robertwang http://welkerswikinomics.com/blog/2008/01/10/can-you-think-of-a-good-example-of-a-positive-externality-of-production/comment-page-1/#comment-3700 robertwang Thu, 17 Jan 2008 18:50:13 +0000 http://welkerswikinomics.com/blog/2007/09/09/can-you-think-of-a-good-example-of-a-positive-externality-of-production/#comment-3700 Hmmm... How about the production of a newspaper? First of all, newspapers are produced from recycled paper, so the "new" (not-yet-recycled) paper can be used for other purposes. Secondly, some newspapers in the states are free in that anyone can pick it up from the newspaper outlet box things. Though I guess this is partial consumption, having someone read the newspaper benefits the producer in that he/she might continue to read their newspapers or for the goal of a free newspaper, to just inform society of information. Other examples I guess would involve producing goods from recycled materials, the positive externality to producing Starbucks coasters from recycled materials is seen in the fact that the "new" materials can be used to make other things in Starbucks, like the cups themselves. Hmmm… How about the production of a newspaper? First of all, newspapers are produced from recycled paper, so the "new" (not-yet-recycled) paper can be used for other purposes. Secondly, some newspapers in the states are free in that anyone can pick it up from the newspaper outlet box things. Though I guess this is partial consumption, having someone read the newspaper benefits the producer in that he/she might continue to read their newspapers or for the goal of a free newspaper, to just inform society of information.

Other examples I guess would involve producing goods from recycled materials, the positive externality to producing Starbucks coasters from recycled materials is seen in the fact that the "new" materials can be used to make other things in Starbucks, like the cups themselves.

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]]> By: Mond http://welkerswikinomics.com/blog/2008/01/10/can-you-think-of-a-good-example-of-a-positive-externality-of-production/comment-page-1/#comment-3689 Mond Wed, 16 Jan 2008 22:52:33 +0000 http://welkerswikinomics.com/blog/2007/09/09/can-you-think-of-a-good-example-of-a-positive-externality-of-production/#comment-3689 Postive externalities of production depends on what is being produced. If trees were produced, the postive externatlity would be cleaner air and less pollution. But if something like clothing was produced, the positive externality could be more colorful and fashionable cool looking clothes? It all comes down to what is being produced. Postive externalities of production depends on what is being produced. If trees were produced, the postive externatlity would be cleaner air and less pollution. But if something like clothing was produced, the positive externality could be more colorful and fashionable cool looking clothes? It all comes down to what is being produced.

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]]> By: Rebecca Sung http://welkerswikinomics.com/blog/2008/01/10/can-you-think-of-a-good-example-of-a-positive-externality-of-production/comment-page-1/#comment-3683 Rebecca Sung Wed, 16 Jan 2008 20:09:58 +0000 http://welkerswikinomics.com/blog/2007/09/09/can-you-think-of-a-good-example-of-a-positive-externality-of-production/#comment-3683 To expand on Christina's point about the positive externalities provided by the production of a movie, most DVDs have the "behind the scenes" or "actors' incites" into the movies; I guess this kind of extra footage can be considered spillover that many fans get to enjoy. When people watch orchestral concerts, some kids just are amazed at how the all the bows move together. So, the production of music (the sight of string instruments being played) creates a positive externality. This is a stretch and I'm not sure if this is a positive externality of production. To expand on Christina's point about the positive externalities provided by the production of a movie, most DVDs have the "behind the scenes" or "actors' incites" into the movies; I guess this kind of extra footage can be considered spillover that many fans get to enjoy.

When people watch orchestral concerts, some kids just are amazed at how the all the bows move together. So, the production of music (the sight of string instruments being played) creates a positive externality. This is a stretch and I'm not sure if this is a positive externality of production.

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]]> By: caleb http://welkerswikinomics.com/blog/2008/01/10/can-you-think-of-a-good-example-of-a-positive-externality-of-production/comment-page-1/#comment-3676 caleb Wed, 16 Jan 2008 12:26:37 +0000 http://welkerswikinomics.com/blog/2007/09/09/can-you-think-of-a-good-example-of-a-positive-externality-of-production/#comment-3676 wow elaine ..... y... g.. wow elaine ….. y… g..

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]]> By: kevinchiu http://welkerswikinomics.com/blog/2008/01/10/can-you-think-of-a-good-example-of-a-positive-externality-of-production/comment-page-1/#comment-3674 kevinchiu Wed, 16 Jan 2008 12:10:55 +0000 http://welkerswikinomics.com/blog/2007/09/09/can-you-think-of-a-good-example-of-a-positive-externality-of-production/#comment-3674 Like said in class, professional sport teams are considered a positive externality, as they help attract people to the regions and build a positive bond and unity among the citizens of the region. For instance, Oklahoma City has been heavily seeking a NBA basketball team not only because it would provide entertainment, but that it would also bring in more people into the city and expand on the city's reputation. Like said in class, professional sport teams are considered a positive externality, as they help attract people to the regions and build a positive bond and unity among the citizens of the region. For instance, Oklahoma City has been heavily seeking a NBA basketball team not only because it would provide entertainment, but that it would also bring in more people into the city and expand on the city's reputation.

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]]> By: Christina Hu http://welkerswikinomics.com/blog/2008/01/10/can-you-think-of-a-good-example-of-a-positive-externality-of-production/comment-page-1/#comment-3655 Christina Hu Tue, 15 Jan 2008 14:28:41 +0000 http://welkerswikinomics.com/blog/2007/09/09/can-you-think-of-a-good-example-of-a-positive-externality-of-production/#comment-3655 Production of swimming pools may create positive externalities, because the production of the pool provides aesthetic value to passerby. The production of plants creates positive externalities as well; the plants absorb CO2 and release oxygen, which benefits all living organisms. I'm not sure if this works, but the production of a movie may provide positive externalities as well because people get to see their favorite stars (like Tom Cruise in China). Production of swimming pools may create positive externalities, because the production of the pool provides aesthetic value to passerby. The production of plants creates positive externalities as well; the plants absorb CO2 and release oxygen, which benefits all living organisms.

I'm not sure if this works, but the production of a movie may provide positive externalities as well because people get to see their favorite stars (like Tom Cruise in China).

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