Public good (economics)
== Public Good (Economics) ==
A public good in economics is a good that is both non-excludable and non-rivalrous. This means that individuals cannot be effectively excluded from use and where use by one individual does not reduce availability to others. Public goods are a central topic in public economics and are often contrasted with private goods, which are both excludable and rivalrous.
Characteristics[edit | edit source]
Public goods have two main characteristics:
- Non-excludability: It is not possible to exclude individuals from the good's consumption. For example, national defense protects all citizens regardless of whether they contribute to its funding.
- Non-rivalry: One person's consumption of the good does not reduce the amount available for others. For instance, one person's enjoyment of a public park does not diminish the enjoyment of others.
Examples[edit | edit source]
Common examples of public goods include:
Free Rider Problem[edit | edit source]
The free rider problem occurs when individuals can benefit from a good without paying for it, leading to under-provision of that good. This is a common issue with public goods, as people may rely on others to contribute to the provision of the good while they enjoy the benefits without contributing themselves.
Solutions[edit | edit source]
Several solutions have been proposed to address the free rider problem, including:
- Government provision: The government can provide public goods funded through taxation.
- Voluntary contributions: Encouraging voluntary donations or contributions to fund public goods.
- Privatization: Converting public goods into private goods where feasible, though this is not always possible or desirable.
Related Concepts[edit | edit source]
See Also[edit | edit source]
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