Negative Externalities In Public Health

nsurance discounts: A discount insurance policy of a government, for workers who complete their education for driving not only facilitate those workers but also reduce compensation for companies, amount of price and number of accidents for drivers and rate of road accidents for society, all as a whole get facilitated by the positive externality of this discount insurance policy of government. • Tax break policy: A state policy to win a break in tax payment for manufacturers or factory and plant holders those install a pollution control unit also with their factory also gave advantage to the residents of that area by decreasing the pollution rate and not only the those residents but also the society as a whole got benefit by decreasing costs

As the producers are not fixed to pay the cost of negative externalities of their products, so the public contribution increases their profit. As these products are profitable, so they produce more not considering the increasing worse affects of them on public health. In reality, these negative externalities, starts a cruel chain of increased sales, big profit and more diseases. High growth of production and sale of cigarette, alcoholic drinks and unhealthy foods like fast food, fizzy drinks and processed snacks of this century are the major examples of negative externalities. The total economic profit and loss of all participants involved, defined the overall cost and benefit to society, but this cost accounting that cover only producers and consumers do not include profit and loss received by third party due positive and negative externalities of these production / services. That’s why this third party automatically gets extra moral and political problems as well as free advantages

Fast food outlet or customers are not concerned that who affected by paying the cost of chronic diseases like diabetes and hypertension that are caused by increasing selling of fast food. Information about products / services that allow consumers to be more informed and make sensible choices, are mostly hidden by corporations. So by this way market practice again deviate from classical economical theory, that provide equal access to related information. This unequal access further increase the problem of negative externalities. To eliminate these negative affects, government should make rules and force companies to pay this negative externality cost. For example, if the people of a community develop Asthma problem caused by the fumes produced by nearby factory, so the company of that factory should pay for their medical bills. By keeping this cost in mind companies more exactly evaluate their expanses and profits to take the decision of making that product. A negative external cost may create an ethical or medical problem and may reduce the societal welfare. For example the over use of antibiotics, developed resistance in bacteria that increase the medical cost in future to treat those infections that can be treated at