“To wear a mask or not to wear a mask?”
“To get the COVID-19 vaccine or not to get the COVID-19 vaccine?”
These questions are politically charged in our society during this pandemic. Will the responses be different from an economics viewpoint? In economics, the concept of unintended consequences is called “externalities” where a private benefit or a private cost incurred by an individual or a firm does not take into account the side effect it has on its immediate surrounding in terms of a social benefit or a social cost. Examples of positive externalities include increasing the value of a neighborhood when neighbors maintain their lawns, while loud music from an immediate neighbor reflects negative externalities. Scott Wolla from the Federal Reserve of St. Louis provides a visual explanation of externalities.
Discussion/Questions:
- From an economics viewpoint, does wearing masks or getting the vaccine promote positive externality or negative externality in the current COVID-19 environment? Explain.
- What type of externality would the barking of your neighbor’s dog on weekday nights exemplify? Explain.
- Should the government intervene to enforce wearing masks or getting the vaccine for a safe lifestyle similar to the law mandating seatbelts for safe driving? Explain.
- Self-reflection: Have you experienced a positive externality at school, work or home lately? How does it make you feel now that you know about both the positive and negative externality concepts? Explain.
Sources: Photo- Unsplash.com: Crowded street at covid times. EconLib: Externalities https://www.econlib.org/library/Enc/Externalities.html. FED of St. Louis: Externalities – The Economic Lowdown Video Series – https://www.stlouisfed.org/education/economic-lowdown-video-series/episode-5-externalities.