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By jwblackwell



9 Questions

What is a public good?

What are some examples of public goods?

What is the free-rider problem?

What is Lindahl tax?

What are digital public goods?

What is the Pareto optimal provision of a public good?

What are local public goods?

What are global public goods?

What are quasi-public goods?


Public Goods: A Summary

  • A public good is a good that is non-excludable and non-rivalrous, meaning that users cannot be barred from accessing or using them for failing to pay for them, and use by one person neither prevents access of other people nor does it reduce availability to others.

  • Capital goods may be used to produce public goods or services that are typically provided on a large scale to many consumers.

  • Public goods may be 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.

  • Public goods include knowledge, official statistics, national security, common languages, law enforcement, public parks, free roads, television and radio broadcasts, flood control systems, lighthouses, and street lighting.

  • 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.

  • Lindahl tax is a type of taxation brought forward by Erik Lindahl for the provision of a public good, according to the marginal benefit they receive.

  • Public goods are not restricted to human beings and are one aspect of the study of cooperation in biology.

  • The free-rider problem is a primary issue in collective decision-making, where consumers can take advantage of public goods without contributing sufficiently to their creation.

  • The free-riding problem is even more complicated than it was thought to be until recently, and under-provision is likely since cost-benefit analysis is being conducted at the wrong income levels.

  • The Pareto optimal provision of a public good in a society occurs when the sum of the marginal valuations of the public good is equal to the marginal cost of providing that public good.

  • Digital public goods include software, data sets, AI models, standards and content that are open source.

  • The UN Secretary-General's Roadmap for Digital Cooperation defines digital public goods as open source software, open data, open AI models, open standards, and open content that adhere to privacy and other applicable laws and best practices, do no harm, and help attain the SDGs.Understanding Public Goods: Local and Global

  • Pareto optimality condition of private goods equates each consumer's valuation of the private good to its marginal cost of production.

  • The classical theory of public goods defines efficiency under idealized conditions of complete information, posing problems for efficient provision of public goods in practice.

  • Local public goods, such as a bus, may help everyone, even those who are not from the neighborhood.

  • Economists have developed the theory of local public goods with overlapping neighborhoods, or public goods in networks.

  • Global public goods are public goods whose benefits are non-rivalrous, non-excludable, and present on or affect large parts of the world.

  • Resolving the distribution of costs associated with maintaining or producing global public goods requires significant cooperation between international bodies and governments.

  • Ownership matters for investment incentives when contracts are incomplete, and the incomplete contracting paradigm has been applied to public goods.

  • Quasi-public goods are items that are neither excludable nor rival in nature, such as roads and education.


Test your knowledge on the concept of public goods with this informative quiz. From definitions to examples to the free-rider problem, this quiz covers various aspects of public goods. Challenge yourself to see how much you know about this essential economic concept. Whether you're a student, professional, or simply curious about economics, this quiz is a great way to learn more about public goods and their role in society. So, get ready to test your knowledge and dive into the world of public goods!

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