I Scream for Ice Cream

Dear Alexa,

With the the warm weather, my children and I have developed a sweet tooth for ice cream. My kids always go for the quadruple scoop cone with sprinkles and hot fudge. I am always left with a sticky mess and super-energized little ones. However, their smiling faces make me melt. Should I limit their ice cream intake to fewer scoops or continue to indulge them?

Sincerely,

Hungry Harry

Dear Hungry Harry,

Doesn’t ice cream just taste so good when it’s a hot summer day?! I face the same consumption problem because frozen yogurt has become one of my favorite indulgences. In order to solve our dilemma, I turned to some fellow economists and discovered that our sweet treat trouble revolves around the concept of positive and negative externalities.

We unconsciously deal with positive and negative externalities everyday. Essentially, this idea states that when someone takes part in an activity, their actions affect the well-being of another person, whether or not they mean to. For example, a child gets a vaccine for the flu and goes to school. The other children who have not already received the vaccine will benefit from his immunity because they are indirectly protected. This is an example of a positive externality since the kids benefit from their classmate’s inoculation and subsequent inability to catch or spread the flu. Alternatively, when companies emit toxic substances into a water source, the public is indirectly impacted. Some are unable to drink clean water while others cannot swim due to the contamination. This is an example of a negative externality because bystanders, the population, are negatively impacted by the companies’ actions.

How do positive and negative externalities relate to our ice cream conundrum? With every ice cream cone your children consume, you take satisfaction from their happiness. Your happiness and your children’s happiness then makes everyone around you happier, as in a chain reaction. Therefore, the bystanders benefit from someone else’s actions.

So, what’s our solution? Giving your children four scoops of ice cream disperses their happiness to everyone around and creates an atmosphere of bliss, even though the serving size may seem exorbitant. So yes, live a little and spread the joy- one bite at a time.

Sincerely,