Public good

Concept of public good in economics and public policy

 This article is about the economic concept.
   For other uses, see Public good (disambiguation).

A public good is a concept in economics and public policy that refers to a good that is both non-excludable and non-rivalrous. This means that individuals cannot be effectively excluded from use, and use by one individual does not reduce availability to others. Public goods are contrasted with private goods, which are both excludable and rivalrous.

Characteristics

Public goods have two main characteristics:

• Non-excludability: It is not possible to prevent people from accessing the good. For example, a public park or national defense.
• Non-rivalrousness: One person's use of the good does not diminish the ability of others to use it. For example, listening to a radio broadcast.

Examples

Common examples of public goods include:

• Clean air
• Public broadcasting
• Street lighting
• Lighthouses
• National defense

Challenges

The provision of public goods often leads to challenges such as the free rider problem, where individuals consume the good without contributing to its cost. This can result in under-provision of the good if not addressed by government intervention or other means.

Economic Theory

In economic theory, public goods are often used to illustrate the concept of market failure, where the free market does not allocate resources efficiently. Economists like Paul Samuelson have contributed significantly to the understanding of public goods.

See also

• Collective action problem
• Tragedy of the commons
• Externality
• Common-pool resource

Further reading

• Samuelson, Paul A. (1954). "The Pure Theory of Public Expenditure". Review of Economics and Statistics.
• Musgrave, Richard A. (1959). "The Theory of Public Finance".

External links

• Economics Help: Public Goods
• Investopedia: Public Good