Friday, November 19

A negative externality

When I went to get my suit altered recently, I discovered an unfortunate negative externality.


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The tailor, it seems, is located on the same floor as Asian Massage parlor and Dare to be Naughty Adult Store — the three businesses share a common door to the street. As I opened the door to go to the tailor, I couldn't help but be concerned about what people would think if they saw me entering. Although I decided to go to the tailor, I could see how some potential customers, at the margin, might not be so brave.

The adult store and potentially the massage parlor (depending on the nature of its massages) are what economists consider to be "a negative externality." Their private activities — their very presence, actually — hurt the tailor's business by deterring customers from opening that door to go to the tailor. The fact that the tailor seems to cater to Christian clientele — notice the "Jesus is The Way, the Truth And The Life" slogan on their banner — likely only compounds the effect of the externality.

Luckily, they did a nice alteration job on my suit in time for my convocation today.