#Forbeginners

What are private benifits:

These are the gains you get directly from doing something.

Example: You go to college → you get a better job → you earn more money.

What are external benifits:

These are the extra benefits others get from your actions.

Example: You go to college → you become a better citizen or start a business → society benefits too

The characteristics of private benifits:

• Personal gain – The benefit goes to the person making the choice.

• Direct – Easy to see and measure.

• Paid for by the user – You usually pay for what you get.

• Motivates action – People often act because of private benefits.

• Private consumption – Only the user enjoys the benefit.

The characteristics of external benifits:

• Shared with others – People nearby or society also gain.

• Indirect – The benefit is not always seen right away.

• Free to others – People enjoy it without paying.

• Creates positive spillovers – One person’s action helps many.

• Often ignored in decisions – People don’t always think about these benefits when acting.

THE END