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    Positive and negative externalities of airline industry

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    Find 2 sources to help you answer the following questions about the industry you chose:

    Research any negative or positive externalities the industry produces.
    1) Does the transaction of a buyer and seller directly affect a third party? Is the effect a negative or positive externality? Please explain.

    Research whether the industry produces public goods or common resources.
    2) Are the goods or resources rival, excludable, or neither? Please explain.

    Organize your research using the Annotated Bibliography above. APA formatted references and a summary of the major points in the article or web sites.

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    Solution Preview

    Airports are an example of an industry with negative and positive externalities. An airport is a non-rivalrous, excludable resource. It is therefore a public good rather than a common pool resource. Once an airport is built, its use by one person doesn't make it less valuable for others, so it is non-rivalrous. But people can be excluded from it if they are unable to purchase tickets.

    The transaction between the airlines and the passengers affects those who live in the vicinity of the airport through pollution. Air traffic congestion is a negative externality that impacts other passengers. I found two articles regarding the externalities of airports.

    Plane Pollution by David Holzman appeared in the Dec. 1997 issue of Environmental Health Perspectives [105 ...

    Solution Summary

    Research any negative or positive externalities the industry produces.