Non-payers can benefit, so voluntary payment is difficult to secure.
A pure public good is non-excludable: preventing non-payers from benefiting is impossible or prohibitively costly. It is also non-rival: one person's use does not reduce what remains for others. This creates a free-rider incentive and can prevent private sellers from collecting enough revenue to provide the socially worthwhile amount. Awareness of non-rejectability means some benefits cannot readily be refused once provision occurs.
- Non-excludable
- Non-payers cannot feasibly be prevented from benefiting.
- Non-rival
- An additional user does not reduce what others receive.
- Funding
- A free rider benefits while leaving others to pay. If enough people wait for others to fund the good, a private seller may collect too little to provide the worthwhile amount.
Classify the characteristics
Non-rejectability
Some protection or other benefit cannot readily be refused once provided in an area. This is an additional awareness point, not a replacement for non-rivalry and non-excludability.
Production versus use
Building flood protection can be expensive even when admitting another beneficiary has no extra resource cost in the model.
Free riding
Beneficiaries may have an incentive not to reveal or pay their full willingness to pay. This creates a financing problem; it does not prove every individual will refuse every voluntary contribution.
Congestion and exclusion
An open park can become rival when crowded; a digital service can exclude users through a login. Classifications depend on the actual characteristics, not the word public or a current zero fee.
| Example under stated conditions | Excludable? | Rival? | Pure public good? |
|---|---|---|---|
| Flood protection within protected area | Not feasibly | No | Yes in this model |
| Hospital bed at a time | Yes | Yes | No |
| Password-protected uncongested digital access | Yes | No in this model | No |
| Open-access congested space | Not feasibly | Yes when congested | No |
Worked example: Flood protection for a district
A flood barrier protects properties behind it. A seller cannot feasibly protect only households that pay. Within the protected area, another household receiving protection does not reduce the protection available to others.
- Non-excludability makes it difficult to charge every beneficiary; a household may wait for others to finance the barrier.
- Non-rivalry means another protected household does not use up a portion of protection in the stated model.
- The barrier still requires construction and maintenance resources. Low or zero additional-user cost is not zero total provision cost.
- Collective funding can overcome the revenue problem, but government still needs to assess benefits, costs and the appropriate scale.
Watch out for this
Anything provided by government is a public good.
Classify by rivalry and excludability, not ownership or whether users pay a fee. A hospital bed is rival and access can be restricted.
Check your understanding
A government hospital has a limited number of beds and can control admission. Is each bed a pure public good?
- Yes, because government owns it.
- Yes, because some patients pay nothing.
- No: a bed is rival and admission can be restricted.