User:TFarhan Azmi/Public good (economics)

Public good(economics) In economics, a public good (also referred to as a social good or collective good) is a good that is both non-excludable and non-rivalrous.

Terminology, and types of goods

Non-rivalrous: accessible by all whilst one's usage of the product does not affect the availability for subsequent use.

Non-excludability: it is impossible to exclude any individuals from consuming the good.

Pure public: when a good exhibits the two traits, non-rivalry and non-excludability, it is referred to as the pure public good.

Impure public goods: the goods that satisfy the two public good conditions (non-rivalry and non-excludability) only to a certain extent or only some of the time.

Private good: The opposite of a public good which does not possess these properties. A loaf of bread, for example, is a private good; its owner can exclude others from using it, and once it has been consumed, it cannot be used by others.

Common-pool resource: A good that is rivalrous but non-excludable. Such goods raise similar issues to public goods: the mirror to the public goods problem for this case is the 'tragedy of the commons'. For example, it is so difficult to enforce restrictions on deep-sea fishing that the world's fish stocks can be seen as a non-excludable resource, but one which is finite and diminishing.

Club goods: are the goods that excudable but are non-rivalrous such as private parks.

Definition matrix

Excludable

Non-excludable Definition matrix Excludable Non-excludable Rivalrous Private goods food, clothing, cars, parking spaces Common-pool resources fish stocks, timber, coal Non-rivalrous Club goods cinemas, private parks, satellite television Public goods free-to-air television, air, national defense Elinor Ostrom proposed additional modifications to the classification of goods to identify fundamental differences that affect the incentives facing individuals Replacing the term "rivalry of consumption" with "subtractability of use". Conceptualizing subtractability of use and excludability to vary from low to high rather than characterizing them as either present or absent. Overtly adding a very important fourth type of good—common-pool resources—that shares the attribute of subtractability with private goods and difficulty of exclusion with public goods. Forests, water systems, fisheries, and the global atmosphere are all common-pool resources of immense importance for the survival of humans on this earth. Changing the name of a "club" good to a "toll" good since many goods that share these characteristics are provided by small scale public as well as private associations. Common examples of public goods include: public fireworks clean air and other environmental goods information goods, such as official statistics open-source software authorship public television radio invention