negative consumption externality

A negative consumption externality occurs when the consumption of a good or service harms others who are not compensated for this harm. This is a form of market failure where the costs of a transaction are not fully borne by the buyer or seller.12

Examples of negative consumption externalities include:
* Secondhand smoke: The health hazards of smoking affect those exposed to it.1
* Large vehicle emissions: The use of SUVs contributes to greenhouse gas emissions and increased wear on roads, and poses a greater accident risk to other drivers.1

These externalities can lead to inefficient market outcomes, as the full social cost is not reflected in the price of the good or service. Governments may intervene through regulations or taxes to address these issues.13