Quasi-Public Goods

But there is an important middle ground between public goods and purely private goods. We might define purely private goods by negating the two characteristics of public goods given above: For purely private goods,

1a) The cost of providing the good increases at least proportionately to the number who benefit from it.

2a) It is always feasible to exclude from the benefit of the good those who do not pay for it.

An example of a pure private good is a potato. If I eat the potato, you cannot, and it will cost twice as much (or more) to double the production of potatos. Also, the farmer can demand that I pay for the potato before I take it home -- so, unless I steal it, I can benefit from it only if I pay. Pure private goods are at the other end of the spectrum from pure public goods.

The intermediate category we may call "quasi-public goods," since they share the characteristics of public goods to some extent. For quasi-public goods,

1b) The cost of providing the good increases less than proportionately to the number who benefit from it.

2b) There are some difficulties in excluding those who do not pay from the benefit of the good.

These two conditions are relative. Some quasi-public goods will come nearer the public end of the spectrum, in that costs increase much less the proportionately than the number of beneficiaries and the difficulty of excluding non-payers is quite considerable. Other quasi-public goods will come nearer the purely private end of the spectrum, in that costs increase almost in proportion to the number of beneficiaries and the difficulty of excluding non-payers is slight. The nearer the good is to the public end of the spectrum, the greater its "degree of publicness" is. The greater its "degree of publicness" is, the greater the incentive problem is.

It seems clear that information products typically are not public goods but are quasi-public goods. Their degree of publicness varies widely, though, and changes in technology (media) can change the degree of publicness. It seems likely that the trend of technology has been to increase their degree of publicness. Nevertheless, most information products continue to be supplied by profit-oriented private business. Thus, unlike pure public goods, government provision will not be necessary in most cases, and may make things worse in some cases.

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