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A connection between different parts of the economy. Spillovers may changes in one industry affect factor spillover to another: if a new factory bids on changes in one industry affect factor supplies to another: if a new factory bids up the wages of unskilled labour so that local people find cleaners or gardeners more expensive, this is a pecuniary spillover. Pecuniary spillovers produce their effects through markets. A non-pecuniary spillover occurs when one producer or consumer inflicts an externality on another: there is usually no market through which they can be paid not to do so. Non-pecuniary spillovers provide a prima facie case for government intervention, by regulation or taxation, whereas pecuniary spillovers do not, except on grounds of income distribution.
Reference: Oxford Press Dictonary of Economics, 5th edt.
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