Mobile phone going off – negative externality of consumption

I was reminded of this clip from Trigger Happy TV by John Wilson of Auckland Grammar. It depicts very well negative externalities of consumption. You are quietly wandering around a gallery – which you paid to enter – and suddenly a mobile phone goes off. The person answering it speaks rather loudly and distrupts the tranquil ambience of the gallery. You are assuming that the person when purchasing a ticket to enter the gallery had not consented to the mobile phone ringing whilst he was viewing the displays. However some may enjoy the spectacle and therefore it becomes a positive externality to them.

The Theory of Negative Externalities
This is where the consumption of a good may have spillover costs or negative externalities for others e.g. passive smoking, drink driving.

If left to the free market goods that have negative externalities of consumption will be under priced (pm) and over consumed (Qm) compared to the socially desirable price and quantity. The government could tax the good, increasing its price to Ps and lowering the level of consumption back to more socially desirable levels Qs.

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