Positive Externalities – Examples

Author: Ahsana K P

Positive externality is the benefit that is enjoyed by a third party (without paying for it) as a result of an economic transaction. Most merit goods like education generate positive externalities.

For example, higher education has positive externalities. There is a private benefit to those who get it. However, others in society may also benefit when some people get higher education. There could be social benefits beyond the private benefits of education.

The remittance from migrants can create both positive and negative externalities. It may encourage certain economic activities on the one hand, but it may make certain other economic activities costly.