Public Goods

Published Jan 15, 2023

Definition of Public Goods

Public goods are goods or services that are available to all members of society without any exclusion. That means they are non-rivalrous and non-excludable (unlike other types of goods). Non-rivalrous means that one person’s consumption of the good does not reduce the amount available for others. Non-excludable means that it is impossible to exclude certain individuals from consuming the good. These types of goods are often provided by the government and financed through taxes.

Example

A common example of a public good is national defense. That means the government provides defense services to all citizens without any exclusion. Furthermore, one person’s consumption of these services does not reduce the amount available for others. Or in other words, all citizens of a country are protected equally by their military.

Other common examples of public goods include public parks, street lighting, and public transportation. All of these are available to all citizens without any exclusion, and one person’s consumption does not reduce the amount available to others.

Why Public Goods Matters

Public goods are important for a variety of reasons. First of all, they provide a basic level of security and safety for all citizens. Furthermore, they can also be used to promote economic growth and development. For instance, public transportation can reduce traffic congestion and pollution, while public parks can provide recreational opportunities for citizens. Finally, public goods can also be used to promote social equality and reduce poverty.