An externality refers to an output of a production process that is unintentionally produced and that when produced results in either a positive effect on other players in the market and that are not compensated for. The cell phone market has experienced rapid growth over the past few decades, and it has been at the center of the technology booms. As a result, many cell phone producing companies have entered this market. The result of the increased number of participants in the cell phone market is an increase in the number of cell phones produced which subsequently increases the number amount of externalities released. There are different externalities that result from cell phone production as discussed below.

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Firstly, cell phone production involves many different chemicals. A cell phone is a combination of many different components which are put together to produce one complete device. The production of these components involves different chemicals some which are toxic. The production process also produces by productions such as chlorofluorocarbons (CFCs) which lead to air pollution. Secondly, cell phones are not easy to recycle. Therefore, when a cell phone’s life expires or if they get damaged beyond repair, then their remains end up in waste pileups and increase the amount of e-waste in the environment. The aspect poses a direct threat to the environment as they lead to land, water, and even air pollution.

Thirdly, cell phones may pose threat to the health of human beings. For example, if the contaminants released from e-waste pile-ups end up n consumption water, it could pose direct threat to human health. Some of the chemicals contained in the cell phones are toxic while others are carcinogenic. For example, Arsenic is in many cases used in the preparation of cell phone circuit boards. This chemical is carcinogenic when consumed by humans and could lead to cancer development or other health complications.

Different methods can be used to measure the externalities produced in the cell phone markets. Some of these methods include the use of hedonic prices, willingness to pay, mitigation costs, and contingency valuation. Willingness to pay is the best method to use in this case. This refers to the amount of money that an externality producer is willing to part with to compensate those affected by the externalities they produce (Delucchi, 2000).

Cell phones have become common in everyday life, and it is nearly impossible to eliminate the devices from usage in today’s world. Therefore, the measure needs to be put in place to mitigate the effects of these externalities. Some of the measures could include the manufacture of cell phones using components that are easily recycled, proper disposal of electronic waste and the relocation of cell phone companies to areas that are away from highly populated areas.

  • Delucchi, MA (2000). Environmental Externalities of Motor Vehicle Use in the US. Journal of Transport Economics and Policy. Pp 35-68, 43 (2S)