Question

When residents in a neighborhood tidy it and keep it neat, there are a number of positive spillovers: higher property values, less crime, happier residents. What types of government policies can encourage neighborhoods to clean up?

Short answer

The government might encourage the neighborhoods by making direct payments or lowering taxes.

Step-by-step solution

Content Introduction

Positive externalities are positive spill overs to third parties that did not purchase the item or service that supplied the externalities.

Content Explanation

The government can encourage people to clean up their communities by launching programmed that provide direct financing for the effort or tax breaks for those who actively participate in the clean-up effort. The government can also encourage local businesses to form a group that will pay for and manage neighborhood clean-up efforts.