Night-time commercial drone operations in QSZs, as a percentage of total urban logistics movements
| Year | Percentage (%) |
|---|---|
| 2018 | 3.1 |
| 2020 | 5.4 |
| 2022 | 8.2 |
| 2024 | 11.5 |
| 2026 | 9.8 |
| 2028 | 7.4 |
| 2030 | 5.2 |
Electric VTOL aircraft* in QSZs, as a percentage of total urban air taxis
| Year | Percentage (%) |
|---|---|
| 2018 | 1.5 |
| 2020 | 3.2 |
| 2022 | 4.8 |
| 2024 | 6.5 |
| 2026 | 8.0 |
| 2028 | 7.8 |
| 2030 | 7.1 |
* Note: an electric VTOL (eVTOL) aircraft is a low-altitude passenger or cargo vehicle retrofitted with multi-rotor acoustic shielding to comply with municipal noise caps.
Excessive urban noise pollution from low-altitude logistics is a clear example of market failure. A primary driver of this failure is the negative externality generated by rapid-delivery commercial drone operators. These commercial operators plan flight corridors directly above densely populated residential neighborhoods to minimize transit times. The resulting high-frequency acoustic emissions disrupt sleep patterns and elevate stress hormones, which represent a significant negative externality borne by local residents. Although urban dense-canopy forestry and sound-absorbing green roofs can damp acoustic wave propagation, private developers have regularly cleared urban woodlands to construct concrete sorting hubs. Had these natural acoustic buffers been preserved, residents would face far lower health and psychological costs from localized noise pollution.
An urban acoustic monitoring network provides a collective mechanism for tracking decibel levels across metropolitan sectors, enabling real-time routing adjustments and regulatory enforcement. Some environmental economists argue that a peaceful acoustic environment and public decibel monitoring networks constitute a public good.
However, the capital expenditure required to install and maintain these high-precision microphone arrays must be financed. This raises the question of who should cover the cost.
Should suburban residents seeking peace and quiet contribute? Should commuters who benefit from rapid drone-delivered goods pay? Or should the drone operators whose commercial flights generate the noise bear the entire burden? The municipal council has proposed that commercial drone operators pay an "acoustic-impact levy" based on flight frequency to fund the maintenance of the monitoring network.
Question
Define the term 'market failure' (Extract E, line 1).
378 exam-style questions on AQA A Level Economics 1.8 The market mechanism, market failure and government intervention in markets, covering 1.8.1 How markets and prices allocate resources, 1.8.2 The meaning of market failure, 1.8.3 Public goods, private goods and quasi-public goods, 1.8.4 Positive and negative externalities in consumption and production, 1.8.5 Merit and demerit goods, 1.8.6 Market imperfections, 1.8.7 Competition policy (A-level only), 1.8.8 Public ownership, privatisation, regulation and deregulation of markets (A-level only), 1.8.9 Government intervention in markets, and 1.8.10 Government failure. Each one has a worked solution and a mark scheme showing where the marks go.