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PPGPortal > Home > Concept Dictionary > P, Q > Public Good

Public Good

A product that one individual can consume without reducing its availability to another individual and from which no one is excluded.
(Investopedia at accessed 23 December 2013)
Economists refer to public goods as "non-rivalrous" and "non-excludable". National defense, sewer systems, public parks and basic television and radio broadcasts could all be considered public goods.

Non-rivalry means that consumption of the good by one individual does not reduce availability for consumption by others; non-excludability that no one can be effectively excluded from using the good. In reality, it is likely that there is no such thing as an absolutely non-rivalrous and non-excludable good. However, economists have recognized that many goods approximate the concept very closely and that the concept is important for understanding why some goods are produced at less than socially optimal levels by markets.


Examples include sidewalks, roads, and the protection of the military. Public goods typically have one of two characteristics. Firstly, they are often non-rivalrous. This means that the consumption of these sorts of goods by one consumer does not reduce the quantity available to be consumed by others. An example is public broadcasting. Secondly, public goods are often “non-exclusive”. This means that once produced, is accessible to all; nobody can be excluded from consuming the good after it is produced. “Pure” public goods are goods that are both non-rivalrous and non-exclusive.


Public goods are an important example of market failure, meaning that for public goods free markets consisting of rational self-interested individuals do not produce economically efficient results. The reason that public goods create inefficient outcomes is because of the "free rider" problem.

(Wikipedia. Accessed July 22, 2010.


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School of Public Policy and Governance