Effects of cars

The externalities of automobiles, as similarly other economic externalities, are the measurable costs for other parties except the car proprietor, such costs not being taken into account when the proprietor opts to drive their car. According to the Harvard University, the main externalities of driving are local and global pollution, oil dependence, traffic congestion and traffic accidents; while according to a meta-study conducted by the Delft University these externalities are congestion and scarcity costs, accident costs, air pollution costs, noise costs, climate change costs, costs for nature and landscape, costs for water pollution, costs for soil pollution and costs of energy dependency.

Negative

The negative externalities seem to be the most obvious to confirm, since the driver does not take into account for example the negative effects of air pollution on third parties, when they opt to drive their car. The legislators and the regulators shall therefore internalize those external costs, either by taxes on fuels for example, either by any kind of limitation to car usage, such as parking meters or urban tolls. Nevertheless it seems the drivers in some countries, already pay some external costs with taxes. Road taxes in the Netherlands for instance, have a relatively high yearly value, which cover the maintenance of the infrastructures. Nevertheless, in the majority of western nations, the external costs of driving, are not covered totally neither by taxes, or by any kind of car usage limitation.

Positive externalities

While the existence of negative externalities seem consensual, the existence of positive externalities of the automobile does not have consensus amongst economists and experts in the transportation sector. The creation of jobs or the fact that the related industries pay taxes, cannot be considered, as such, as positive externalities, because any legal economic activity pays taxes, and the big majority also needs job demand. Time saving to the driver, and therefore eventually more personal production, cannot either be considered a positive externality, because the driver has already taken those factors into account when they opted to use their car, and therefore these factors cannot be considered, by many authors, a pure externality.

Accessibility and Land Value

Notwithstanding the above objections, some authors enumerate positive externalities for the automobile like accessibility and land value. Where land is expensive, it is developed more intensively. Where it is more intensively developed, there are more activities and destinations that can be reached in a given time. Where there are more activities, accessibility is higher and where accessibility is higher, land is more expensive.

City Growth

Economists have sought to understand why cities grow and why large cities seem to be at an advantage relative to others. One explanation that has received much attention emphasizes the role of agglomeration economies in facilitating and sustaining city growth. The clustering of firms and workers in cities generates positive externalities by allowing for labor market pooling, input sharing, and knowledge spillovers.

Nevertheless some other economists mention urban decay and urban sprawl as a negative effect or cost of the automobile, when the city grows due to automobile dependency.

See also

• Economics of car use
• Car costs
• Automobile dependency