Lot Lines: Externalities and the train horn
J. David Chapman
What determines the price and attractiveness of commercial and residential real estate? Researchers at the University of Central Oklahoma Real Estate Program are working in this area. We are surveying Oklahoma City residents to determine the effect of certain conditions, events and developments on their willingness to purchase local real estate. In our business, we refer to these conditions, events and developments as externalities.
Externalities occur when the production or consumption of a specific good or service affects a third party that is not directly related to that production or consumption. Externalities can be positive or negative, such as pollution, traffic, real estate developments, and public areas and parks.