A side-effect on others following from the actions of an individual or group. This effect is not bought by those affected and may be unwished for. Thus, while the acquisition of a car may benefit one household by improving mobility, it generates pollution and creates congestion for others.
Externalities may be positive—the building of a hall of residence may bring new business to a local shop—or negative—a new road scheme may create planning blight for home owners. Two types of externality are recognized: public behaviour externalities covering property, maintenance, crime, and public behaviour, and status externalities resulting from the social and ethnic standing of the household.