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Public Goods

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Submitted By leonielewin
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Public Goods Public Goods is defined as goods for which rivalry among consumers is absent and exclusion of nonpaying customers is difficult. Public Goods have two distinguishing characteristics; they are non-rival in consumption and non-excludable. Non-rivalry means that making the good available to one consumer does not reduce its availability to others. While non-excludability means that it is impossible to exclude nonpaying customers from receiving the good. Public Goods may be consumed without reducing the amount available for others, and cannot be withheld from those who do not pay for it. However; public goods also known as an item whose consumption is not decided by the individual consumer, but by the society as a whole, and which is financed by taxation. It also include economic statistics and other information such as ,law enforcement, national defenses, parks and other things for the use and benefit of all. While the imperfections of market solutions to public-goods problems must be weighed against the imperfections of government solutions. Governments rely on bureaucracy, respond to poorly informed voters, and have weak incentives to serve consumers. Therefore they produce inefficiently. Furthermore, politicians may supply public “goods” in a manner to serve their own interests rather than the interests of the public. Examples of wasteful government spending and pork barrel projects are legion. Government often creates a problem of “forced riders” by compelling persons to support projects they do not desire. Private means of avoiding or transforming public-goods problems, when available, are usually more efficient than governmental solutions. Public goods that are available everywhere are sometimes referred to as global public goods. Such as fresh air, knowledge, lighthouses, flood control systems and street lighting.
Public goods are rare because there are a few goods that can meet both of the requirements. For instance my real –world example; my Aunt built a house next to mine, her actions does not diminish my national defense protection, but instead it makes it non-rival. Another example is fireworks display, because it is non-excludable (impossible to prevent people from using it) and it is also non-rivalrous because on individual’s use does not reduce availability to others.

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