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Private good
From Wikipedia, the free encyclopedia
A private good is defined in economics as a good that exhibits these properties:
- Excludable - it is reasonably possible to prevent a class of consumers (e.g. those who have not paid for it) from consuming the good.
- Rivalrous - consumptions by one consumer prevents simultaneous consumption by other consumers.Private goods satisfies an individual want while public good satisfies a collective want of the society
A private good is the opposite of a public good, as they are almost exclusively made for profit.
An example of the private good is bread: bread eaten by a given person cannot be consumed by another (rivalry), and it is easy for a baker to refuse to trade a loaf (excludable).
One of the most common ways of looking at goods in economy, illustrated in the table below, is the classic division based on:
- is there a competition involved in obtaining a given good?
- is it possible to exclude a person from consumption of a given good?
| 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 | ||
| 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 |