how do economists measure externalities 
economists use two measures to evaluate an externality first economists use a cost of damages approach to evaluate what the expense would be to rectify the externality as we may be seeing with greenhouse gas emissions some externalities may extend beyond the point of repair another method of measuring externalities is the cost of control method instead of fixing the externality economists measure what preemptive and preventative steps can be taken to stop the externality from occurring similar to how an actuary assesses a financial value to an event economists may assign multiple financial measurements to an externality the bottom linean externality is a byproduct of a primary process this side effect may be good or bad and may be caused by a production process or consumption process many externalities relate to the environment due to the nature of company and individual actions though there are many ways governments companies and people can take responsibility to both prevent and rectify externalities 