Editing Externality (section)

===Positive===
A positive externality (also called "external benefit" or "external economy" or "beneficial externality") is the positive effect an activity imposes on an unrelated third party.<ref>{{cite book |last=Varian |first=H.R.|date=2010|title=Intermediate microeconomics: a modern approach |location=New York, NY |publisher=W.W. Norton & Co}}</ref> Similar to a negative externality, it can arise either on the production side, or on the consumption side.<ref name="externality" />

A positive production externality occurs when a firm's production increases the well-being of others but the firm is uncompensated by those others, while a positive consumption externality occurs when an individual's consumption benefits other but the individual is uncompensated by those others.<ref>Gruber, J. (2010) Public Finance and Public Policy, Worth Publishers. G-8 (Glossary)</ref>

==== Positive production externalities ====
Examples of '''positive production externalities'''

[[File:Beekeeper at work.jpg|thumb|right|200px|Beekeepers' hives of bees can help pollinate the surrounding crops, which is a positive production externality.]]
* A [[beekeeper]] who keeps the [[bees]] for their [[honey]]. A side effect or externality associated with such activity is the [[pollination]] of surrounding crops by the bees. The value generated by the pollination may be more important than the value of the harvested honey.
* The corporate development of some [[free software]] (studied notably by [[Jean Tirole]] and [[Steven Weber (professor)|Steven Weber]]<ref>''The success of open source'' [[Steven Weber (professor)|Steven Weber]], 2006 Harvard University Press. {{ISBN|0-674-01292-5}}.</ref>)
* [[Research and development]], since much of the economic benefits of research are not captured by the originating firm.<ref>{{cite web |title=Externalities - Definition and examples |url=https://conceptually.org/concepts/externalities |website=Conceptually |access-date=26 Jan 2021}}</ref>
* An industrial company providing first aid classes for employees to increase on the [[job safety]]. This may also save lives outside the factory.
* Restored historic buildings may encourage more people to visit the area and patronize nearby businesses.<ref>{{cite journal |last1=Romero |first1=Ana Maria |title=The Positive Externalities of Historic District Designation |journal=The Park Place Economist |date=1 January 2004 |volume=12 |issue=1 |url=https://digitalcommons.iwu.edu/parkplace/vol12/iss1/16/ }}</ref>
* A foreign firm that demonstrates up-to-date technologies to local firms and improves their productivity.<ref>{{cite journal |last1=Iršová |first1=Zuzana |last2=Havránek |first2=Tomáš |title=Determinants of Horizontal Spillovers from FDI: Evidence from a Large Meta-Analysis |journal=World Development |date=February 2013 |volume=42 |pages=1–15 |doi=10.1016/j.worlddev.2012.07.001 |s2cid=153632547 |url=http://www.nusl.cz/ntk/nusl-124047 }}</ref>
* [[Public transport]] can increase economic welfare by providing transit services to other economic activities, however the benefits of those other economic activities are not felt by the operator, it can also decrease the negative externalities of increasing road patronage in the absence of a [[Congestion pricing|congestion charge]].<ref>{{Cite journal |last1=Elgar |first1=Ilan |last2=Kennedy |first2=Christopher |date=2005-06-01 |title=Review of Optimal Transit Subsidies: Comparison between Models |url=https://ascelibrary.org/doi/10.1061/%28ASCE%290733-9488%282005%29131%3A2%2871%29 |journal=Journal of Urban Planning and Development |language=EN |volume=131 |issue=2 |pages=71–78 |doi=10.1061/(ASCE)0733-9488(2005)131:2(71) |issn=0733-9488|url-access=subscription }}</ref>
* The personal cost of an education will have an external benefit to society.<ref name="boyes_pg105_quoted">{{cite book
  | last1 = Boyes
  | first1 = William
  | last2 = Melvin
  | first2 = Michael
  | title = Microeconomics, Fifth Edition
  | publisher = Houghton Mifflin Company
  | year = 2002
  | page = 105
  | quote = When you acquire an education, however, you do not get a check in the amount of savings your education will create for society.
  | isbn = 0-618-12795-X
}}</ref>

[[File:Pos_consumer_externality.png|thumb|Positive consumption externality]]

==== Positive consumption externalities ====
Examples of '''positive consumption externalities''' include:
* An individual who maintains an attractive house may confer benefits to neighbors in the form of increased [[real estate appraisal|market values]] for their properties. This is an example of a pecuniary externality, because the positive spillover is accounted for in market prices. In this case, house prices in the neighborhood will increase to match the increased real estate value from maintaining their aesthetic. (such as by mowing the lawn, keeping the trash orderly, and getting the house painted) <ref>{{cite web |last1=Samwick |title=What Pecuniary Externalities? |url=https://economistsview.typepad.com/economistsview/2007/01/what_pecuniary_.html |website=Economist's View |access-date=8 November 2020}}</ref>
* Anything that reduces the rate of transmission of an infectious disease carries positive externalities.  This includes vaccines, quarantine, tests and other diagnostic procedures.  For airborne [[infection]]s, it also includes masking.  For waterborne diseases, it includes improved sewers and sanitation.<ref><!-- Externalities, public goods, and infectious diseases -->{{cite Q|Q111367750}}</ref> (See ''[[herd immunity]]'')
* Increased [[education]] of individuals, as this can lead to broader society benefits in the form of greater economic [[productivity]], a lower [[employment-to-population ratio|unemployment rate]], greater household mobility and higher rates of [[participation (decision making)|political participation]].<ref>Weisbrod, Burton, 1962. External Benefits of Public Education, Princeton University{{page needed|date=April 2019}}</ref>
* An individual buying a product that is interconnected in a network (e.g., a [[smartphone]]). This will increase the usefulness of such phones to other people who have a video cellphone. When each new user of a product increases the value of the same product owned by others, the phenomenon is called a network externality or a [[network effect]].  Network externalities often have "[[:wikt:tipping point|tipping points]]" where, suddenly, the product reaches general acceptance and near-universal usage.
* In an area that does not have a [[public sector|public]] [[fire department]], homeowners who purchase [[private sector|private]] fire protection services provide a positive externality to neighboring properties, which are less at risk of the protected neighbor's fire spreading to their (unprotected) house.

Collective solutions or [[public policy|public policies]] are implemented to [[regulation|regulate]] activities with positive or negative externalities.