An indirect effect of an action, be it a cost or benefit, for a third party who did not agree to the action is known as
Social Studies · High School · Tue Nov 03 2020
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An indirect effect of an action, whether a cost or benefit, on a third party who did not consent to the action is known as an external effect or externality.
When such an effect causes unintended costs, it is called a "negative externality," while if it results in unintended benefits, it is called a "positive externality."
For example, if a factory produces goods but also pollutes the air as part of its production process, nearby residents may suffer health issues. Those residents are third parties who did not agree to the factory's actions, and the pollution represents a negative externality. Conversely, if someone plants a garden that beautifies the neighborhood, enhancing property values even for those who didn't participate in the gardening, that's a positive externality.