Public goods are goods a group in economics and belong to the commons. Pure public goods are characterized by the properties in the consumer non- excludability and non-rivalry. Impure public goods are goods that meet the criteria for public goods only partially.
- 3.1 Pure Public Good
- 3.2 impure public good
Non - excludability
Public goods have the property of non-exclusivity, namely the insufficient allocation or enforceability of property rights to the estate, for which there can be various reasons (economic, technological, institutional, normative, etc.). For example, it would not be possible to exclude from the consumption of goods someone " clean environment ". This feature does not automatically constitutive for the existence of a public good because it can also occur in private goods. As goods characteristic of this feature can be a good first awarded by the political decision-making process at all. For example enters the Good "broadcasting" mostly in two forms: first, as a free-to- good with non-excludability, and secondly as a public good with at least partial realization of excludability (pay- TV). Sometimes it is synonymous with the feature of Nichtzurückweisbarkeit ( consumerism ) was used.
Non - rivalry
Public goods have no rivalry in consumption - they could be consumed at the same time by different individuals. This is referred to by many authors as the key feature of public goods. For example, while a car can be simultaneously driven by only one man, a clean environment can be " consumed " by several individuals simultaneously. The rivalry in the consumption of a good may be interpreted as a negative external effect, and - Set variable - eg overcrowding effects.
Examples of public goods
Classic textbook examples of public goods are peace, dikes, lighthouses or street lighting. A more recent example which the properties of a public good is perfectly fulfilled the climate.
Public roads only apply, however, as public goods, if there is no mutual obstruction of traffic participants is (lack of rivalry in consumption ). Especially with congestion - if each additional vehicle negatively affect the other road users due to time wasted - on the other hand there is a rivalry in consumption. Such a road is considered common pool or impure public good. If, however, a road tax levied and thus universal access ( excludability ) inhibited may be a street shall be deemed Klubgut ( ungestaut ) or private goods ( stowed ).
Types of public goods
Some authors distinguish the concepts of public good and a public good, while they use other synonyms.
In theory between pure public goods and mixed forms of public and private goods, which are impure public goods, distinguished. Public goods that are consumed in several states are sometimes referred to as global public goods.
If a regard as the necessary public good or not offered by the market not sufficient, the state can intervene and make adjustments. ( Market regulation ).
Pure Public Good
Pure public goods (including specific public goods) are goods for which the exclusion principle does not apply, while no rivalry in consumption exists (also known as Nutzenunteilbarkeit ).
A market for such goods thus does not exist, because, although those interested in the estate, but few are willing to to pay a market price that the seller would be willing to produce it. This is not necessarily the fact that one must also be paid without paying the price for the good could come just to enjoy the good. One then speaks of the so-called free-rider behavior.
In general, the material is offered or made available by the State and through taxes and other charges are all real and potential "users" it forced a financial contribution.
For example, the country's security is a forced -funded public good - it is simultaneously consumed by all residents in a country without the benefit of each individual consumption is affected by the consumption of other individuals. At the same time, no single individual can be excluded.
Since pure public goods for all demanders are freely accessible, they also belong to the category of the commons.
Impure public good
Under an impure public good ( common pool ) is defined as a commodity, with the exclusion principle does not apply, but there is rivalry in consumption, that is, the benefits of a consumer through quite another user is limited. The classic example is a congested road (no toll, because this would mean the operation of the exclusion principle ). With an additional vehicle, the vehicle speed decreases further, etc., or the storage costs increase. Also environmental goods as " clean air " or fish stocks in the sea are often cited as examples of impure public goods.
Public goods in the experimental economics
The Experimental Economics working intensively with the problem of providing public goods, in particular the free-rider problem.
This problem is usually with a payoff function for a period for the subject ( i) modeled as follows:
Where e is the equipment in monetary units, and c are the individual contribution, and f the (interest ) is factor by which the sum of all contributions is multiplied. N is the number of subjects and j is the index for all subjects. This is repeated several periods as a rule.
Common is an interest rate. It corresponds to the characteristics of this problem that it would be better for all if all do everything there ( the public good is positive interest ). However, there is an individual incentive to contribute nothing, since the marginal product of the keep (1 ) is greater than the marginal product of the public good (f). The economically rational person would therefore be nothing from the beginning, the public good will be offered.
The experiments have shown that subjects give a contribution in general, but that the overall level of contributions collapses very quickly. The experimenters are now trying to fathom by variations, as can be achieved that a socially desirable level of contributions is reached. As effective communication is and penalties have proven, however, rewards as unsuccessful. The contribution level is relatively independent to the group size and is sensitive to the interest rate.
There are different approaches to management:
- Provision by the State
- Taxation, for example: Pigouvian tax
- Quota; trade quotas
- Precautions to prevent users changing the private good
- Acceptance ( Coase theorem )