Externalities happen

My Principles of Microeonomics textbook (with Stephen King and Greg Mankiw) uses a dog ‘mess’ example to illustrate the concept of negative externalities. No solution is proposed.

Click here to see the Freakonomics solution. Costly but perhaps effective.

One thought on “Externalities happen”

  1. I remember seeing a story about this years ago on a kids science show about a Council in Australia somewhere doing exactly that (it was a small town so apparently feasible to DNA test all dogs in the town). (Can’t find any reference to it unfortunately).

    And Port Phillip Council apparently tried this back in 2002, but moved instead to a fine for walking a dog without carrying a poo bag (which would seem much easier to administer and enforce than DNA testing): http://www.theage.com.au/articles/2002/09/05/1031115910970.html

    Those guys at Freakonomics are behind the times.

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