Question

Which of the following are public goods: (a) the fire brigade, (b) clean streets, (c) refuse collection, (d) cable television, (e) social tolerance, \((\mathrm{f})\) the postal service?

Short answer

Public goods: (a) Fire brigade, (e) Social tolerance.

Step-by-step solution

Understand the Characteristics of Public Goods

Public goods are defined by two main characteristics: they are non-excludable and non-rivalrous. Non-excludable means that it is not feasible to exclude anyone from using the good. Non-rivalrous means that one person's use does not reduce the availability for others.

Analyze Each Option

Evaluate each item based on the characteristics of public goods. If both characteristics apply, then the item is a public good; otherwise, it is not.

Assess (a) the Fire Brigade

The fire brigade is non-excludable because they provide services to all in need within their area, and non-rivalrous, as the service to one individual does not diminish the ability to serve others. Thus, it is a public good.

Assess (b) Clean Streets

Clean streets have a level of public benefit. While keeping streets clean may offer public benefits and be non-rivalrous, it is excludable since maintenance can be confined to specific areas or regions. Therefore, clean streets are not a pure public good.

Assess (c) Refuse Collection

Refuse collection is an excludable service as it is specific to those who pay for it. It may become rivalrous if the service capacity is reached, hence refuse collection does not fully meet the characteristics of a public good.

Assess (d) Cable Television

Cable television is excludable, as service is provided to subscribers only. Additionally, the consumption is rivalrous since the provider can limit the quality or quantity accessible simultaneously. Therefore, it is not a public good.

Assess (e) Social Tolerance

Social tolerance is non-excludable and non-rivalrous; it is a societal benefit that all can enjoy without reducing others' enjoyment. Hence, it is considered a public good.

Assess (f) the Postal Service

The postal service is excludable because one must pay for the service. While it may appear non-rivalrous under normal conditions, it can become congested, impacting service levels, thus it is not purely a public good.

Conclusion

From the analysis, (a) the fire brigade and (e) social tolerance qualify as public goods due to their non-excludable and non-rivalrous nature.

Key concepts

Non-Excludable

A non-excludable good or service is one that you cannot easily exclude people from using. Think about how the fire brigade operates. Their services are available to everyone in their designated area, regardless of whether those people have individually contributed to funding the service or not. This means no one can reasonably be excluded from being helped in the event of a fire, making the service non-excludable.

Some examples of non-excludable goods include the air we breathe and national defense services. Despite the fact that these goods are available to all, it is not feasible to limit access to those who choose to use them. The nature of non-excludability means these goods generally require public funding, as the market mechanism (where you pay for what you use) doesn’t work well in these scenarios.

• Non-excludable goods cannot be easily restricted, making them widely accessible.
• Public funding is often necessary since market-based pricing isn’t feasible.
• Examples include clean air and national security.

Non-Rivalrous

Non-rivalrous goods are those that can be used by more than one person at the same time without depleting the overall supply available to others. A classic example is a lighthouse. Whether one ship or a hundred rely on its light, its utility remains stable and available for all.

Social tolerance is another great example of a non-rivalrous good. When one person benefits from a more tolerant society, it doesn't reduce the level of tolerance available to others. Every additional person benefiting from tolerance adds to the societal value without subtracting from others' experiences.

• Non-rivalrous goods do not diminish in availability with increased use.
• Many people can benefit simultaneously without affecting the quantity available.
• Examples include a streaming video online or national broadcasts.

Excludable Goods

Excludable goods are services or products that can limit who has access to them based on payment or other barriers. For example, cable television is a typical excludable good because only paying subscribers receive access to the service. If you don't pay for cable, you can't watch the channels.

Refuse collection is another excludable good. You need to pay for the service to have your waste collected. Not participating in the payment scheme means being excluded from this service.

Additionally, the postal service, while providing widespread benefits, is also excludable because receiving mail services usually requires paying for postage.

• Excludable goods require payment or fulfilling certain conditions for access.
• They typically operate on a market mechanism where usage is matched with payment.
• Examples include subscription-based services and toll roads.