Analyse the external costs that can be caused by the building and expansion of an airport.

External costs are harmful effects on third parties. They are social costs minus private costs

Building and operating an airport will cause noise pollution and air pollution which will be experienced by those living near the airport. This may lead to health problems

There may be traffic congestion and this may delay people’s journeys

The prices of houses close to the airport may fall reducing local residents’ wealth. Local residents may also be displaced

Train companies may lose revenue as people switch from train travel to air travel

There may be environmental damage e.g. loss of wildlife habitats