1. a consequence or side effect of an economic activity experienced by unrelated third parties, without being reflected in market prices
Usage: economics; commonly used in plural form
2. an outward appearance or superficial aspect; something external or visible
Usage: formal; less common in modern usage

Examples

• Air pollution from factories is a negative externality that affects nearby residents.
• The study examined the externalities of industrial production on public health.
• Positive externalities, such as education benefits to society, are often undervalued by markets.
• Economists argue that carbon emissions represent a major negative externality of fossil fuel use.
• The company failed to account for the externalities of its waste disposal practices.
• Government policies aim to internalize externalities by taxing polluters.