On the Essence and Classification of Externality

Externality is a focus of the economic research,but the conception of externality remains unclear because of the differences of objects of the studies.From the viewpoint of system theory and with the action side as the core,this paper analyzes the extension of the influence and divides the externality into three types: Marshall externality,Coase externality and Pigou externality,so that the outline of externality is clarified.It can also be distinguished as simple externality and complex externality.On this basis,this paper reveals the essence of externality,i.e.the no-participation of the influenced side and the lack of effective feedback mechanisms.Once the externality is redefined and the externality coefficient is introduced,the study of externality can be led from qualitative research into quantitative research.