Theme 1: Positive externalities - breakfast & education

Definition of Positive Externality: This occurs when the consumption or production of a good causes a benefit to a third party. For example: When you consume education you get a private benefit. But there are also benefits to the rest of society.

A good example of positive externalities from a government initiative.....

Providing school breakfasts free to all children in disadvantaged English primary schools helps them to make two months’ additional progress in reading, writing and mathematics over the course of a year. This is the central finding of research by Christine Farquharson of the Institute for Fiscal Studies, presented at the Royal Economic Society's annual conference at the University of Bristol in April 2017. 

In the study, the Education Endowment Foundation funded the charity Magic Breakfast so that 53 schools could establish breakfast clubs in 2014/15 at a total cost of £25 per eligible pupil. The Institute for Fiscal Studies analysed the results by comparing the schools offering breakfast clubs to similar schools, and finds that children aged 6 and 7 made an additional two months' progress in core subjects. Children aged 10 and 11 made similar gains in English.

These gains seem to be driven by fewer illness-related absences and by better behaviour and concentration in the classroom, meaning that even students who don’t eat breakfast at school can benefit from the improved learning environment.

The author comments: ‘The improvement in classroom behaviour and concentration in schools randomly selected for Magic Breakfast support is exceptional. In the policy-making world, the effect of Magic Breakfast provision is as close to magic as an intervention can get.’