A public good, in economics, is defined as a commodity or service that is provided without profit to all members of a society, either by the government or a private individual or organization. A key characteristic of a public good is that it is non-excludable and non-rivalrous. This means that no one can be prevented from consuming the good, and one individual's use of the good does not reduce availability to others. Examples of public goods include fresh air, knowledge, national defense, street lighting, and public fireworks displays. These goods can lead to market failures if left solely to private markets, as businesses may find it difficult to charge consumers directly for their use.
The concept of non-excludability implies that it is often not feasible to exclude individuals from using the good. For instance, once a country's military is protecting the nation, it is protecting all residents, regardless of whether each contributes to its upkeep. Similarly, lighthouse illumination extends benefits to all ships nearby, whether or not they have contributed to the maintenance of the lighthouse. This characteristic often leads to what economists call the "free rider problem," where individuals assume they can benefit from the good without contributing to its provision, potentially leading to underinvestment in the public good.
Non-rivalry, another defining characteristic, means that one person's consumption of a public good does not hinder the consumption of others. For example, when a scientist discovers a new mathematical theorem, others can also use this knowledge without diminishing its value or the ability of others to use it. This attribute makes public goods particularly beneficial but also poses significant challenges in terms of funding and resource allocation. Governments often need to step in to ensure the adequate provision of public goods through taxation and public spending.
Despite their benefits, providing public goods can be complicated. Determining the appropriate level of provision and funding can be contentious, involving complex assessments of public needs and the economic implications of taxation. Moreover, the intangible nature of some public goods, like national_security or judicial_systems, makes it difficult to measure their usage and impact accurately. Challenges also arise in ensuring that the provision of public goods is both efficient and equitable. For these reasons, the role of public goods in economic theory and public policy remains a critical area of study and discussion within public_economics.