Definition of "externality" [ex•ter•nal•i•ty]

• The condition or quality of being external or externalized. (noun)
• Something that is external. (noun)
• An incidental condition that may affect a course of action: "Our economic system treats environmental degradation as an externality—a cost that does not enter into the conventional arithmetic that determines how we use our resources” ( Barry Commoner). (noun)

American Heritage(R) Dictionary of the English Language, Fifth Edition. Copyright (c) 2011 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

• "In this case, the externality is the relationship with the neighbours, especially since those who would be most disappointed are also likely to be the most active in the community."
• "“Because the externality is not fallen upon a few, easily-identifiable parties”"
• "I think the obvious externality is cook-the-books rating agencies."