How to judge a policy
How to judge a policy
An externality policy is successful if it moves consumption or production closer to the level that society would choose while reducing the external cost. A fall in the harmful activity after a policy is introduced is not automatically proof that the policy caused it, because other factors may have changed too.
Step-by-step lessons on OCR GCSE Economics 3.8.3 Impact of externality policies. Each one builds up to exam-style questions. Build a solid grasp of supply and demand and cost/revenue calculations before tackling the evaluation-heavy policy topics.