Sean Mulholland is Associate Professor of Economics at Stonehill College in Easton, Massachusetts. Specializing in economic growth, environmental economics, and labor economics, his work has appeared in the Journal of Economic Growth, the Eastern Economic Journal, Education Economics, and the Villanova Law Review.

In economic activity, there are sometimes ‘externalities’ or spillover effects to other people not involved in the original exchange. Positive externalities result in beneficial outcomes for others, but negative externalities impose costs on others. Prof. Sean Mulholland addresses a classic example of a negative externality, pollution, and describes three possible solutions for the problem: taxation, government regulation, and property rights. The first two options are difficult to monitor and may create perverse incentives. A better solution to overcome the externality is property rights, as described by Ronald Coase. As long as property rights are well‐​defined, divisible, and defendable, parties can negotiate to reduce the impact of the pollution.

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