Public Goods

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    Public Goods

    • Public goods are consumed collectively
    • It is difficult to charge for them directly, so they’re often financed via taxes
    • If left to the free market, most public goods wouldn’t be provided

     

    • Non excludability means that the good is provided for all irrespective of whether they have paid for the product indirectly through taxation
    • People that use public goods but haven’t paid for its provision are called free riders

     

    • Non-rivalry is also an important characteristic of public goods
    • The aforementioned characteristics (non rivalry and non excludability) are ideals of a pure public good – which makes them the opposite of private goods
    • In the real world, not all public goods possess both characteristics to the same extent

     

    • Most quasi-public goods tend to be non excludable, but isn’t non-rval
    • They therefore have some of the qualities of a private good

    See example table

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