Question:

What are some positive externalities of the gasoline industry?

by  |  earlier

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I also would want to know the negative ones as well.

Does the transaction of a buyer and seller directly affect a third party? Is the effect negative or positive?

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  1. I don't know of any positive ones; there are countless negative ones. Aside from the noxious refineries themselves, there are:

    * the impacts of the pipelines and tankers (spills, etc.) both those bringing crude oil to the refineries and those taking gas away.

    * the poisoning of many people by adding lead to make cheaper gasoline work in car engines (now prohibited, but the prohibition was fought by the refiners for decades)

    * the environmental impact of all the special catalysts needed for the refining process.

    * the political and social pressures that the industry has promoted to encourage the use of more gasoline (think lobbying and bribing government officials; deceptive ad campaigns; etc.)

    Max V was wrong in note that mass transit is a positive externality. There were horse drawn buses and electric streetcars and even cable cars long before gasoline was readily available.


  2. yes, the transaction affect a third party.  If you are referring to just the industry and not the product it self then I can think of pollution as a negative externality.  Have you ever drove by a refinery?  They pollute the air big time.  So the 3rd party in this case are stuck with polluted air.  Too much carbon dioxide release by the production of gasoline can lead to global warming.  So now you affect people in a global scale.  Also what about oil spills? They do happen in the gasoline industry.  And when it does it affects a lot of people, natural resources, sea life.

    One positive externality is that  using gasoline mass transportation becomes possible which promotes economic growth which benefits everyone since the standard of living goes up.

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