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An externality is a consequence not considered in analysis. An externality that affects the interests of other groups of people or other decision makers is referred to as a spillover. If the effects of an externality are appreciable, it may have to be taken into account (internalized) in the analysis. The term externality derives from economics, where externalities are costs or benefits not taken into account in a transaction or system of transactions. For example, the cost borne by others when an industry pollutes a stream would be referred to as an externality. (IIASA)

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