Public Goods

CORE DEFINITION

In economics, a public good, also known as a social good or collective good, is a good that is both non-excludable and non-rivalrous, meaning that one person's use does not prevent others from using it, nor does it reduce its availability to others. Therefore, such a good must be valuable to multiple users and can be used by many people simultaneously. This contrasts with common goods, which are non-excludable but rivalrous to some extent, such as wild fish populations in the ocean. If too many fish are caught, the population depletes, so restrictions must be placed on others' fishing; such goods are common goods. Capital goods can be used to produce public goods or services that are "...typically provided on a large scale to many consumers." Unlike other types of economic goods, public goods are described as "non-rivalrous" or "non-excludable," meaning one person's use does not prevent others from using them, nor does it reduce their use by others. Similarly, using capital goods to produce public goods may lead to the creation of new capital goods.