Public goods
Welfare economics and public policy
It analyses goods whose use can be non-rival and from which others are difficult to exclude.
Historical context
The distinction between rivalry and exclusion developed in welfare economics to analyse collective provision.
Overview
A lighthouse can guide several ships at once and its light is hard to reserve for those who pay. If people can benefit without contributing, ordinary payment mechanisms may fund less provision than users collectively want.
Main claims
Difficulty excluding users and lack of rivalry create particular funding problems.
Debates and nuances
The properties of a good are distinct from the public or private ownership of its provider.
This entry provides educational context.