Public Goods

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