The term "external effect" can be explain as a condition that occurs when production or consumption activities of an entity affect the welfare of other(s) subject(s) without having to pay compensation for that impact. The major difficulty for determining external costs is that they cannot be confirmed through the application of market laws and well-known market analysis with interactive effects of demand and supply. The transport greatly affects the quality of life of people, flora and fauna. The interest of studying transport externalities is objective of several researches and special attention is given to how reduce these negative externalities of transport in practice. This paper considers the external transport costs, their significance and their monetary values estimated in relevant EU studies. The methodology for estimating external transport costs as well as specification of a model for assessment of these costs in Republic of North Macedonia is also shown in this paper. The results obtained by this model are discussed and commented.

external transport costs