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Common good (economics)
From Wikipedia, the free encyclopedia
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It has been suggested that this article or section be merged with Common-pool_resource. (Discuss) |
In economics the term common good is used to refer to rivalrous and non-excludable goods. One of the most common ways of looking at goods in economics, illustrated in the table below, is the classic division based on:
- whether there is competition involved in obtaining the goods
- whether it is possible to exclude a person from consumption of the goods
A classic example is fish stocks in international waters; no one is excluded from fishing, but as people take fish the stocks for later fishermen are depleted. Where people take to secure short-term gain without regard for the long-term consequences is called tragedy of the commons. For example, overfishing leads to less fish for everybody.
| Excludable | Non-excludable | |
| Rivalrous | Private goods food, clothing, toys, furniture, cars |
Common-pool resources / Common good water, fish, hunting game |
| Non-rivalrous | Club goods cable television |
Public goods national defense, free-to-air television, air |
| Private and public goods | ||
The goods referred to as common pool resources are also known as common goods.
Sometimes, club and common goods are included in the broad definition of public goods. There are always some goods that can be argued to belong in more than one of the above categories.
Common goods should not be confused with another subtype of public goods: the social goods, which are defined as goods that could be delivered as private goods, but are delivered instead by the government for various reasons (usually social policy).
| Types of goods
public good - private good - common good - common-pool resource - club good - anti-rival goods (non-)durable good - intermediate good (producer good) - final good - consumer good - capital good |