Externalities Definition:

Economic externalities refer to transactions that occur between

two parties where either party assess a cost or grants advantages on a
third party where there is no practical way of compensating the
effected party. Externalities are the effect of one party's deeds on the
prosperity of another. The producer and consumer are the main two
parties in the economic transaction. Also, there is third parties
indirectly affected and they could be individuals, resource, property
owner, or organizations.
Externalities are categorized into two different categories:
positive and negative. positive externality is the advantage which is
enjoyed by a third-party as a consequence of an economic transaction.
A negative externality make a reverse impact on bystanders. It is an
eighth which is brooked by a third party as a consequence of an
economic transaction.
Transportation infrastructure externalities:
transportation is known to be one of the major sources of
externalities worldwide where I choose to make my assignment about.

Positive externality:
Road transport infrastructure positive externalities could contain
the raises in property value. property values may raises because of
improved accessibility and potential agglomeration benefits. Indeed,
increased accessibility results into higher land values and therefore car
parking becomes a less viable option for town center space. With the
introduction of road pricing in urban centers, areas outside a priced
zone may become more attractive and increase in value.
Many studies done to identify the impact off new transport
infrastructure on residential properties in districts through which the
lines pass. The aim of the studies was to determine whether improved
accessibility due to public transport investment in the area had any
effect on residential property values. They found that there was an
average increase of in values of properties near to the transportation
network opened.
Other study was used to identify price differentials between properties
with good access to rail services on the new Metrolink routes or
existing rail routes and those that do not, before and after the opening

of the Metrolink service. The results suggested that house prices

increase with distance from the CBD.
the influence of transport on property values depends on four factors;
the availability of transport, transport costs, travel time and the
convenience of transport modes.

Negative externality:
The contribution of transport systems to pollution is a significant
negative externality. The higher the level of concentration of transport
activities, the higher their environmental impacts are being felt by the
local community. This is particularly the case for large transport
terminals, such as ports, rail yards and airports.
Many air pollutants have been identified as being closely related to
transportation. Carbon Monoxide (CO) Carbon monoxide is a colorless,
odorless gas, the result of the incomplete combustion of hydrocarbons.
Transportation accounts from 70 to 90% of total carbon monoxide
emissions. It is thus the air pollutant the most strongly associated with
transportation.
Water Pollutants
Transportation contributes significantly to the pollution of the
hydrosphere in various ways ranging from air pollution fallouts to the
construction and maintenance of infrastructure such as roads, railways
and ports. The first type of impacts are related to the transport modes
As an important source of air pollution, transportation accounts on a
similar scale for fallouts. In some areas transportation may account for
up to 25% of nitrogen fallouts in water. It is estimated that acid
rains may account for more than 75% of the growth of acidity of lakes.
Since fallouts are a continuous accumulation and occur over a longer
period than most water pollution sources, they have a higher impact
on still-water (lentic) environments than running-water (lotic).
Noise

Road accounts for approximately 70% of total noise emissions by

transportation. It must be noted that different road transportation
modes have different scales of noise emissions. Main sources of noise
come from the engine and the friction of the wheels over the road
surface. Further, travel speed and the intensity of traffic are directly
linked with its intensity of noise.
externalities relation to the willingness to pay (WTP) Discuss how
the postive and negative externalities relate to the
willingness to pay (WTP) analysis
Transport also has negative effects, such as noise, air pollution, and
congestion, which have hardly been taken into account in planning
strategies. The need to consider these external costs or externalities is
nevertheless urgent to ensure simultaneous sustainability of the
transport sector and economic growth.
Nowadays, there is general agreement regarding the need to
internalize these negative externalities, by treating them as a priority
when formulating infrastructure policy and logistics strategy.

Reference:
http://www.economicsonline.co.uk/Market_failures/Externalities.html
http://www.people.hofstra.edu/geotrans/eng/ch8en/appl8en/ch8a2en.ht
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http://eres.architexturez.net/system/files/pdf/eres2001_300.content.pdf
-http://www.navarra.es/NR/rdonlyres/01127969-9DBE-4FF5-AF944416CA83D049/223813/04AnalysisoftheWilli.pdf