What is public good? Provide examples. What issues are involved in determining the value of public good to society?
http://en.wikipedia.org/wiki/Public_good
Public goods are goods or services that are non-excludable and non-rivalrous, meaning they are available for everyone to use and one person's use does not diminish its availability for others. These goods are usually provided by the government or public sector and are intended to benefit society as a whole.
Examples of public goods include:
1. Street lighting: Once installed, street lights provide light to everyone passing by, regardless of whether they contribute to their maintenance or not.
2. National defense: The military protects the entire country, irrespective of individual contributions or involvement.
3. Clean air and water: Regulations and policies aim to ensure that everyone benefits from clean air and water.
4. Public parks: Parks and recreational areas are freely accessible to all members of the public.
5. Public libraries: Libraries offer a wealth of books, resources, and facilities that can be used by anyone.
There are several issues involved in determining the value of public goods to society:
1. Free riders: Public goods are typically non-excludable, meaning it is difficult to prevent individuals from benefiting from them, even if they don't contribute to their provision. This creates a free-rider problem, as some people may choose not to contribute but still enjoy the benefits. This can undermine the sustainability and funding of public goods.
2. Cost estimation: Determining the value or cost of public goods is often challenging. Quantifying the benefits to society and estimating the costs of providing these goods can be complex and subjective.
3. Distribution of benefits: Public goods are meant to benefit society as a whole, but the distribution of these benefits may not be equal. Certain individuals or communities might experience more or fewer benefits depending on their location or other factors.
4. Opportunity costs: The provision of public goods requires financial resources, which are limited. Choosing to allocate funds to one public good often means sacrificing resources for another, leading to difficult decisions and trade-offs.
5. Public preferences and priorities: Determining the value of public goods relies on understanding the preferences and priorities of the public. Different individuals and groups may have varying opinions on which goods are essential and where resources should be allocated.
Addressing these issues requires careful planning, policymaking, and a consideration of societal needs and priorities. Various economic theories and techniques, such as cost-benefit analysis and public opinion surveys, can be used to help determine the value and allocation of public goods.