Parks & Economy

Today, while running in Central Park, I noticed the mix of life around me from kids in strollers, runners, cyclists, older folks practicing yoga, people rowing boats. It made me think about externalities.

An externality is basically a side effect of an activity that impacts others, without those effects showing up in the price of what’s being done. For example, pollution from a factory raises health costs for people who don’t buy the factory’s product.

So then I thought: what about parks? For neighborhoods that don’t have parks, what’s the externality? Since, for most of my life, I didn’t live near a place which had a decent park to run/play on.

• From the perspective of a neighborhood, the lack of parks lead to less people walking or working out which might affect the productivity of a few hundred families. But at the scale of a country’s economy, it adds up to hundreds of billions of dollars in lost efficiency.
• Take this example: less or no workout leads to more heart problems. The cost doesn’t fall on the individual alone, it’s carried by society when a significant percentage of the population becomes physically unwell. And this compounds. Think about how a single sick person in a family needs care, other family members have to step in, spending their time and energy. That snowball effect eats away at precious hours of work and leisure, making families more stressed, less efficient, and ultimately creating a heavier burden on the country’s economy.
• And when people don’t have parks to burn off their energy, unhealthy coping mechanisms rise. Remember how COVID spiked alcohol sales? Over-dependence on alcohol or other substances follows, which often leads to more crime, drunk driving, and even domestic violence.