<p>Infrastructure is part of production process for many goods. For example, to produce canned food you first have to transport produce to a factory that will preserve the food and can it. If that transportation is done over some road or a bridge then the infrastructure contributes to the production process as well as the truck does. The factory itself is also part of production process.</p>

CC BY-SA 4.0
2023-05-13T08:50:51.330Z
2023-05-13T08:50:51.330Z
1muflon1
<p><a href="https://en.wikipedia.org/wiki/Goods#:%7E:text=In%20economics%2C%20goods%20are%20items,services%2C%20which%20are%20not%20transferable." rel="nofollow noreferrer">Goods</a> in economics are any items that satisfy human wants: thus they include not only physical goods but also services of various kinds.  Infrastructure such as buildings, roads and bridges – though it often contributes indirectly to the production of physical goods as explained in the answer by 1muflon1 – most directly provides services to users of the infrastructure.  Because those services are provided as a stream over many years, items of infrastructure are appropriately regarded as capital goods.</p>
<p>Residential buildings, for example, provide housing services – this being a term in common use in housing economics (see for example <a href="https://www.sciencedirect.com/science/article/abs/pii/S1051137704000038" rel="nofollow noreferrer">Zabel (2004)</a> ) and in national accounting (see this explanation by the <a href="https://www.bea.gov/resources/methodologies/housing-services" rel="nofollow noreferrer">US BEA</a>). Where the occupier of a home is a tenant, their rent represents a payment for housing services.  Owner-occupiers also benefit from housing services but, except when they have a mortgage or their home needs maintenance, do not make ongoing payments for them.</p>
<p>There doesn’t appear to be a standard term for the services provided by roads to road users.  Nevertheless, there clearly is an important service provided.  For some roads in some countries, there is a charge (a <a href="https://en.wikipedia.org/wiki/Toll_road" rel="nofollow noreferrer">toll</a>) for use of the road, providing evidence that the services provided by the road have a monetary value to users.  But even where there is no charge (so that subject to possible congestion the services provided by the road approximate to a public good), users still benefit from those services.  Just imagine trying to drive an ordinary car from city A to city  B without a road. Similar considerations apply to bridges.</p>

CC BY-SA 4.0
2023-07-01T17:32:49.380Z
'There doesn’t appear to be a standard term for the services provided by roads to road users.' ... a term often used is a 'trip' with an origin and destination.
Jesper Hybel
CC BY-SA 4.0
2023-05-13T19:55:23.877Z
2023-05-14T14:56:22.897Z
2023-05-14T14:56:22.897Z
Adam Bailey
<p>A capital good is produced to produce other goods or to provide services, which means it doesn't get consumed entirely in the production process. Then, in what sense roads, buildings, bridges, statues, and so forth, are capital goods? What do they produce once the government builds them?</p>

<macroeconomics>
Infrastructure a capital good?
Vinay Sharma
# Infrastructure a capital good?

(Asked by: username_0 on 2023-05-13)

A capital good is produced to produce other goods or to provide services, which means it doesn't get consumed entirely in the production process. Then, in what sense roads, buildings, bridges, statues, and so forth, are capital goods? What do they produce once the government builds them?

**Tags:** macroeconomics


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## 2 answers

### Answer by username_1 on 2023-05-13. Score: 1

Infrastructure is part of production process for many goods. For example, to produce canned food you first have to transport produce to a factory that will preserve the food and can it. If that transportation is done over some road or a bridge then the infrastructure contributes to the production process as well as the truck does. The factory itself is also part of production process.


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### Answer by username_2 on 2023-05-13. Score: 1

[Goods](https://en.wikipedia.org/wiki/Goods#:%7E:text=In%20economics%2C%20goods%20are%20items,services%2C%20which%20are%20not%20transferable.) in economics are any items that satisfy human wants: thus they include not only physical goods but also services of various kinds. Infrastructure such as buildings, roads and bridges – though it often contributes indirectly to the production of physical goods as explained in the answer by username_1 – most directly provides services to users of the infrastructure. Because those services are provided as a stream over many years, items of infrastructure are appropriately regarded as capital goods.

Residential buildings, for example, provide housing services – this being a term in common use in housing economics (see for example [Zabel (2004)](https://www.sciencedirect.com/science/article/abs/pii/S1051137704000038) ) and in national accounting (see this explanation by the [US BEA](https://www.bea.gov/resources/methodologies/housing-services)). Where the occupier of a home is a tenant, their rent represents a payment for housing services. Owner-occupiers also benefit from housing services but, except when they have a mortgage or their home needs maintenance, do not make ongoing payments for them.

There doesn’t appear to be a standard term for the services provided by roads to road users. Nevertheless, there clearly is an important service provided. For some roads in some countries, there is a charge (a [toll](https://en.wikipedia.org/wiki/Toll_road)) for use of the road, providing evidence that the services provided by the road have a monetary value to users. But even where there is no charge (so that subject to possible congestion the services provided by the road approximate to a public good), users still benefit from those services. Just imagine trying to drive an ordinary car from city A to city B without a road. Similar considerations apply to bridges.

> **Comments:**
> **username_3**: 'There doesn’t appear to be a standard term for the services provided by roads to road users.' ... a term often used is a 'trip' with an origin and destination.  

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