Sometimes in a market transaction there are benefits -- and costs -- that nobody pays for.
Like when you're walking down the street and you stop to enjoy the scent of your neighbour's prize roses. Your neighbour tilled the soil and bought the plants, but you get the floral blast of joy -- for free. That's what economists call a positive externality.
But there's a dark side to externalities too.
Some of the worst negative externalities involve the environment.
The poisoned rivers and smoggy air that don't get tallied on the invoice
Dartmouth College economist Charles Wheelan
walk us through the world of externalities and market failures. Along
the way, we'll hear how farmers, honeybees, and even the Chicago Cubs
are dealing with externalities.
And finally, we'll hear from environmental economist Marc Jaccard
about the bill we've run up on the planet's tab.