Public Goods

Public goods, also known as collective goods, are those goods that can be consumed by anyone in society. Public goods need to have the following characteristics. First, consumption of these goods by one individual should not prevent another individual from consuming them, since public goods are not depletable. The first criterion makes public goods nonrivalrous goods. Second, no one can be prevented from consuming the goods. Thus, public goods are nonexcludable goods. Third, people should not be forced to use or not use public goods. In this sense, public goods are nonrejectable goods. Because of these characteristics, free markets are not willing to produce and procure public goods. People are not willing to pay for something that belongs to everyone. For example, people will be ...