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Spillover Effects

Spillover effects, known by the economic term externalities, occur when an individual or entity engages in an activity and as a by-product affects a bystander. The effect on the bystander, either positive or negative, is a spillover effect. One example of positive spillover effects is when a person receives a flu shot to decrease the chance of getting the flu. By being less likely to catch the flu, a person will be less likely to give the flu to those around them. Therefore, it can be concluded that getting a flu shot improves the health outcomes of other people in addition to the person receiving the flu shot. Hence, spillover effects are effects from an activity that extend beyond the intended individuals or entities. When ...

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