flood-control dams; pavements; public drainage. It is likely that the market, left to itself, will seriously such goods, or possibly not produce them at all. This is because the market will only provide goods for which a profit can be made, and pure public goods possess two important properties that together make their production on the basis of private profitability extremely difficult. These features are: non-rivalry (or non-diminishability); non-excludabilty. Firstly, consider the characteristic of non-rivalry: this means that one person's use of the public good does not deprive any other person of such use or does not diminish the amount available to others; for example, if one person enjoys the benefits of being protected by the police-force, a flood control dam or the national defense system, it does not prevent everyone else doing the same; similarly, if one person benefits from walking along a street at night-time which is paved, free of pot-holes, and well-lit, the benefits and the availability to others would not be diminished. Secondly, consider the characteristic of non-excludability: this that when the public good is provided to one person, it is not possible to prevent others from enjoying its consumption - sometimes summarized as: provision at all means provision for all. For example, if a police force, a flood-control dam or a national defense system is successful in offering protection to citizens of a country, once it has been provided it is impossible to exclude anyone within the country from consuming and benefiting from them. Similarly, for a paved and well-lit public street, nobody can be prevented from enjoying its benefits.
flood-control dams; pavements; public drainage. It is likely that the market, left to itself, will seriously such goods, or possibly not produce them at all. This is because the market will only provide goods for which a profit can be made, and pure public goods possess two important properties that together make their production on the basis of private profitability extremely difficult. These features are: non-rivalry (or non-diminishability); non-excludabilty. Firstly, consider the characteristic of non-rivalry: this means that one person's use of the public good does not deprive any other person of such use or does not diminish the amount available to others; for example, if one person enjoys the benefits of being protected by the police-force, a flood control dam or the national defense system, it does not prevent everyone else doing the same; similarly, if one person benefits from walking along a street at night-time which is paved, free of pot-holes, and well-lit, the benefits and the availability to others would not be diminished. Secondly, consider the characteristic of non-excludability: this that when the public good is provided to one person, it is not possible to prevent others from enjoying its consumption - sometimes summarized as: provision at all means provision for all. For example, if a police force, a flood-control dam or a national defense system is successful in offering protection to citizens of a country, once it has been provided it is impossible to exclude anyone within the country from consuming and benefiting from them. Similarly, for a paved and well-lit public street, nobody can be prevented from enjoying its benefits.
1.4_market_failure_.docx