An externality is an outside factor or condition that can affect something else. A snow storm for example, is an externality that can cause delays at the airport.
Externality comes from the Latin root word externus meaning "outside" or "outward." An externality is something on the outside that affects other things. Often an externality is a behavior or result of behavior by one party that affects others who have no choice in its happening. For example, factory pollution is an externality that can affect people's health and well-being. It's outside of their control and yet it has an impact on their lives.
