Public Goods
Main Characteristics
Non-excludability
Benefits derived from pure public goods cannot be confined to those who have paid for it. Non-payers can enjoy the benefits of consumption at no financial cost to themselves - The free-rider problem.
Non-rival consumption
Each party's enjoyment of the good does not diminish others' enjoyment
Non-rejectable
The collective supply of a pure public good for all means that it cannot be rejectable by people. An example is a national nuclear defence system or major flood defence projects.
Pure Public Goods
Pure public goods have all the properties of a public good
- Streetlights
- National Nuclear defence system
Quasi-public goods
Quasi-public goods have only some of the properties of a public good.
Public Beach
- Rivalry - Some spots better than others, if the beach is full people will get worse spots.
- Non-excludable: No requirements to enter the beach.
Wifi Zone
- Rivalry: Connection gets worse as more people connect
- Non-excludable: anyone can connect
Parks
- Rivalry: Benches / better spots get used up
- Non-excludable: anyone can enter