Externalities
Education as an externality

Externalities are instances whereby a decision is made and people who are not involved in any way of the decision making are affected by it. There are two types of externalities, positive and negative.

A positive eternality, also known as external benefit, is when others benefit due to an activity that we pursue. How is education related here? Well, being in Singapore whereby education determines our future, our economy will benefit as a result from us being more productive, creative and equipped. Our community will also benefit due to us being able to rationale better. This will allow us to make better decisions towards situations like when we are about to commit a crime, we are able to weigh our costs due to the things that we have learnt and this will therefore, refrain us from committing the crime and this benefits our community and others. Therefore due to us pursuing a good education and wanting a better future, the benefit is whereby our company and economy will grow and negative things like crime rates are actually reduced.

A negative externality, also known as a external cost, is when others are harmed as a result of an activity that we pursue. Being in such a competitive society whereby grades mean everything to us. Weaker students may be affected emotionally and mentally when they are unable to keep up to the standards or do not do as well as others. This may result in undesired actions such as giving up on school, skipping class or totally not caring about education. This is one externality that we should prevent as education is very important.

Shaun T02

Labels: externality

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