Singing Karaoke at Home.

Sometimes, i would get to hear neighbours singing loudly, blasting their karaoke system away during the day. This is a form of negative externality. Neighbours are forced to listen to their singing, whether is it nice or awful.

It is a form of negative externality is because we did not pay for the usage or enjoyment of the karaoke system but are forced to suffer from the loud music it provides.

Let's say, mr Sing pays $500 for the karaoke system, and when he sings loudly, as time to come, his hearing will be affected, therefore a $100 for his hearing aid. His bills every month ? Maybe $20 more.
So, his total cost is $600, plus a marginal cost of $20 for every monthly bill.

Mr Listen did not pay for the karaoke, but lets say he paid $1000 for the tv. The loud music Mr Sing created caused Mr Listen to be unable to hear the tv program he is watching. Mr Listen got a few options.

He can switch off his tv and do other things.
He can buy headphones so he can hear.

Lets say he buys the headphones

Cost of that, $20( headphones)+ $2( bus fare)+ $100( long usage will cause him to affect his hearing, so hearing aid in the future )= $122

Mr Listen will have a "loss" of $122.

He suffered from the negative externality of the karaoke system.


done by: shawnald

Labels: externality

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