4) Consider the deﬁnition of public goods introduced in the chapter, is a bus a public good? Is an automatic teller machine (ATM)? Is a public park? Is a library? (Fields and Fields 2017, 78).
Original post by Ed Piersa:
A public good is defined as “a good that, if made available to one person, automatically becomes available to others” (Edwards 2020, 74). Moreover, “A public good is distinguished by the technical nature of the good, not by the type of organization making it available” (Edwards 2020, 74). Thus, private ownership does not preclude a radio signal from being a public good as it is made available to anyone with a radio, for example.
In reference to the question above, a bus should be considered a public good. Although bus service is not free to a person that wishes to use it, it is made available to all local citizens. On the other hand, an Automated Teller Machine (ATM) is not a public good. It is only made available to members of that financial institution (or another financial institution that is accepted by the ATM). If a local citizen does not have a credit or debit card, he or she does not have access to an ATM.
As far as a public park is concerned, it is most definitely a public good. It is made available to all local citizens. The majority of public parks are free to enter as well. Libraries are more complex though. If a library is a public institution then it should be considered a public good; however, if it is a privately owned library, it should not be considered a public good. The reason for this is private libraries are normally only accessible to its members – not the public.
Edwards, Christopher. 2020. Environmental Finance and Economics. New York: McGraw-Hill Education.
Thanks for clearly outlining accessibility as a key difference between a public good and private good!
It is interesting to consider the barriers interfering with accessibility of relatively private goods, as well. Why limit accessibility to knowledge by making certain libraries public and others public?
Are public goods just designed to preserve the quality of private goods? The issue of public vs. private goods is particularly intriguing in terms of parks. Why limit accessibility to nature by making certain parks public and others private? How is the entrance fee for certain state and national parks rightfully determined? How do declared wilderness areas fit into the equation?
Response by Ben Short:
Mary – You have posed some great questions around public vs private goods. I was particularly interested in the entrance fee question. At first, I just made the assumption it was based upon units of measurement looking at foot traffic and costs to maintain the areas. However, after doing some digging, it seems I was a bit naive in my assumption. The Land and Conservation Fund Act outlines requirements around fees for national parks. The Act highlights the economic and social factors involved in determining fee price:
“All fees established pursuant to this section shall be fair and equitable, taking into consideration the direct and indirect cost of the Government, the benefits of the recipient, the public policy or interest served, the comparable recreation fees charged by non-Federal public agencies, the economic and administrative feasibility of fee collection and other pertinent factors” (Committee on Resources 2004, 23-8).
I found this helpful in understanding as well as appreciative that their approach seems to be holistic. However, aside from using recreation fees charged by non-Federal agencies as a reference point, I wonder how they are able to determine the aggregate demand for visiting these areas?
U.S. Congressional Committee on Resources. 2004. “Compilation of Selected Laws Concerning National Forests and Related Matters” United States Congress. Accessed June 25, 2020. https://www.govinfo.gov/app/details/CPRT-105HPRT37787