Throwing litter as an externalities

One example of externalities is the act of littering in public places. Many people litter out of their convenience. This is a form of externalities as there are people who benefitted from this course of action as well as people who have to pay the price for this action

For people who are unable to find a job, the act of littering in public places serves as a positive externality to them as the government would have to hire people to clean up the places. However, there is still a limited number of people whom the government would hire as cleaners to clean up public areas. This is due to the law of diminishing returns as there might not be that much litter for too many cleaners to clean up. If the government hires too many cleaners, then the marginal cost to hire one more cleaner would be higher than the marginal benefit (which is the amount of litter they clear).

For other people, the act of littering in public places serves as a negative externality. This is because the litter thrown will dirty public places, causing it to be unhygienic resulting in the breeding of virus and germs leading to other people getting ill. This will impose a cost on these people who did not throw the litter as they will have to visit a doctor to get their illness cured. Another negative externality is the effect on the tourism industry. Tourist might not want to visit Singapore because they might not feel comfortable with the polluted environment. Although the people working in the tourism industry might not have littered, however their business may still be affected.

The government also imposes fines in order to deter people from littering.

Kay Yong T02

Labels: externality

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