External Benefit

External Benefit

The benefit of a transaction to parties who do not directly participate in it. Externality can be either positive or negative. For example, a merger can lead to higher share prices and bonuses for employees, benefiting shareholders and employees at the two companies merging. This can create wealth and positively impact a community. A transaction may have both external benefits and external costs: a transaction may result in a factory opening in one city and one closing in another. An external benefit is also called positive externality. See also: Externality.

External productivity measures are by definition more difficult to develop, and will always be subject to criticism of the method of allocating some portion of external benefit (usually economic) to an educational program.

Positive externalities occur when an external benefit is generated by the producer of a good but because there is no market for the externality the producer cannot get compensated for producing this extra benefit.

Software compatibility in the PC industry (Chapters 2 and 3) creates a large external benefit for any user, as anyone who remembers what it was like when Apple and IBM machines were still incompatible can tell.

Total quantity or scope: Wakefield Council are looking to appoint one or two providers for the provision of external benefit processing of a) housing benefit and council tax support claims and b) for processing work associated with the issue of Council Tax bills.

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