Public good (economics)

In economics, a public good (also referred to as a social good or collective good)^[1] is a good that is both non-excludable and non-rivalrous. Use by one person neither prevents access by other people, nor does it reduce availability to others.^[1] Therefore, the good can be used simultaneously by more than one person.^[2] This is in contrast to a common good, such as wild fish stocks in the ocean, which is non-excludable but rivalrous to a certain degree. If too many fish were harvested, the stocks would deplete, limiting the access of fish for others. A public good must be valuable to more than one user, otherwise, its simultaneous availability to more than one person would be economically irrelevant.

Capital goods may be used to produce public goods or services that are "...typically provided on a large scale to many consumers."^[3] Similarly, using capital goods to produce public goods may result in the creation of new capital goods. In some cases, public goods or services are considered "...insufficiently profitable to be provided by the private sector.... (and), in the absence of government provision, these goods or services would be produced in relatively small quantities or, perhaps, not at all."^[3]

Public goods include knowledge,^[4] official statistics, national security, common languages,^[5] law enforcement, public parks, free roads, and many television and radio broadcasts.^[6] Flood control systems, lighthouses, and street lighting are also common social goods. Collective goods that are spread all over the face of the Earth may be referred to as global public goods. This includes physical book literature^{[dubious – discuss]}, but also media, pictures and videos.^[7] For instance, knowledge is well shared globally. Information about men's, women's and youth health awareness, environmental issues, and maintaining biodiversity is common knowledge that every individual in the society can get without necessarily preventing others access. Also, sharing and interpreting contemporary history with a cultural lexicon (particularly about protected cultural heritage sites and monuments) is another source of knowledge that the people can freely access.

Public goods problems are often closely related to the "free-rider" problem, in which people not paying for the good may continue to access it. Thus, the good may be under-produced, overused or degraded.^[8] Public goods may also become subject to restrictions on access and may then be considered to be club goods; exclusion mechanisms include toll roads, congestion pricing, and pay television with an encoded signal that can be decrypted only by paid subscribers.

There is a good deal of debate and literature on how to measure the significance of public goods problems in an economy, and to identify the best remedies.

^ ^a ^b Oakland, W. H. (1987). Theory of public goods. In Handbook of public economics (Vol. 2, pp. 485–535). Elsevier.
^ For current definitions of public goods see any mainstream microeconomics textbook, e.g.: Hal R. Varian, Microeconomic Analysis ISBN 0-393-95735-7; Andreu Mas-Colell, Whinston & Green, Microeconomic Theory ISBN 0-19-507340-1; or Gravelle & Rees, Microeconomics ISBN 0-582-40487-8.
^ ^a ^b Tatom, J. A. (1991). Should government spending on capital goods be raised?. Federal Reserve Bank of St. Louis Review, 73(3), 3–15. Accessed at [1] Archived 17 April 2021 at the Wayback Machine
^ Joseph E. Stiglitz, "Knowledge as a Global Public Good" in Global Public Goods, ISBN 978-0-19-513052-2
^ Leach, John (2004). A Course in Public Economics. Cambridge University Press. p. 171. ISBN 978-0-521-53567-0. Retrieved 23 July 2021. Knowledge is a pure public good: once something is known, that knowledge can be used by anyone, and its use by any one person docs not preclude its use by others.
^ Kumar, V. "Why Government is Needed to Supply Public Goods?". newsandsociety.expertscolumn.com. Retrieved 4 October 2022.
^ Cowen, Tyler (December 2007). "Public Goods". In David R. Henderson (ed.). The Concise Encyclopedia of Economics. The Library of Economics and Liberty. Archived from the original on 28 March 2010. Retrieved 19 February 2010.
^ Rittenberg and Tregarthen. Principles of Microeconomics, Chapter 6, Section 4. p. 2. Archived 19 March 2013 at the Wayback Machine. Retrieved 20 June 2012.

[Oakland-1] Oakland, W. H. (1987). Theory of public goods. In Handbook of public economics (Vol. 2, pp. 485–535). Elsevier.

[2] For current definitions of public goods see any mainstream microeconomics textbook, e.g.: Hal R. Varian, Microeconomic Analysis ISBN 0-393-95735-7; Andreu Mas-Colell, Whinston & Green, Microeconomic Theory ISBN 0-19-507340-1; or Gravelle & Rees, Microeconomics ISBN 0-582-40487-8.

[Tatom-3] Tatom, J. A. (1991). Should government spending on capital goods be raised?. Federal Reserve Bank of St. Louis Review, 73(3), 3–15. Accessed at [1] Archived 17 April 2021 at the Wayback Machine

[ReferenceA-4] Joseph E. Stiglitz, "Knowledge as a Global Public Good" in Global Public Goods, ISBN 978-0-19-513052-2

[5] Leach, John (2004). A Course in Public Economics. Cambridge University Press. p. 171. ISBN 978-0-521-53567-0. Retrieved 23 July 2021. Knowledge is a pure public good: once something is known, that knowledge can be used by anyone, and its use by any one person docs not preclude its use by others.

[6] Kumar, V. "Why Government is Needed to Supply Public Goods?". newsandsociety.expertscolumn.com. Retrieved 4 October 2022.

[cowen-7] Cowen, Tyler (December 2007). "Public Goods". In David R. Henderson (ed.). The Concise Encyclopedia of Economics. The Library of Economics and Liberty. Archived from the original on 28 March 2010. Retrieved 19 February 2010.

[8] Rittenberg and Tregarthen. Principles of Microeconomics, Chapter 6, Section 4. p. 2. Archived 19 March 2013 at the Wayback Machine. Retrieved 20 June 2012.

[1]

[2]

[3]

[4]

[5]

[6]

[7]

[8]