Public Good

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DEFINITION of 'Public Good'

A product that one individual can consume without reducing its availability to another individual and from which no one is excluded. Economists refer to public goods as "non-rivalrous" and "non-excludable". National defense, sewer systems, public parks and basic television and radio broadcasts could all be considered public goods.

BREAKING DOWN 'Public Good'

One problem with public goods is the free-rider problem. This problem says that a rational person will not contribute to the provision of a public good because he does not need to contribute in order to benefit.

For example, if Sam doesn't pay his taxes, he still benefits from the government's provision of national defense by free riding on the tax payments of his fellow citizens.

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