Assignment 4: Public Goods - ECON 22060

Assignment 4 Public Goodsecon 22060in The Fourth Assignment You Are

Identify a good you have used in the past month that is either a public good, common resource, or artificially scarce. Explain why the good is the type you believe it to be by analyzing whether it is rival or non-rival and excludable or non-excludable. Discuss who provides this good, especially distinguishing between government and private, market provision. Also, consider whether this good is likely to face free rider problems and why. Avoid examples from class.

Paper For Above instruction

In recent months, my use of outdoor parks exemplifies a common resource, which is a prevalent category of public goods. Common resources are typically rival but non-excludable. The rivalry stems from the finite nature of the physical space; when a park is crowded, fewer amenities or open areas are available for additional visitors, indicating rivalry. Conversely, access to parks is generally non-excludable because it is difficult to prevent individuals from entering, especially in public jurisdictions that maintain free access parks. This combination places parks firmly within the common resource category, characterized by rivalry but non-excludability.

The provision of parks is primarily managed by government agencies such as local or municipal authorities, funded through public budgets derived from taxes. In many cases, these parks are maintained by public parks departments whose primary goal is to provide recreational space accessible to all residents. Private organizations or non-profits may also operate certain parks or natural reserves, often with specific entrance fees or membership fees, but these are exceptions rather than the norm. The government provision ensures that parks remain accessible to the widest possible population, aligning with their role as a public good in certain respects.

One significant problem associated with parks as common resources is the potential for free riding. Because access is generally non-excludable, individuals can benefit from the park's amenities without directly contributing to its upkeep or maintenance. For instance, visitors enjoy the natural beauty and recreational opportunities freely, knowing that others also use the park with little financial contribution on their part. This free rider problem poses challenges for sustainable management and funding, as it may lead to overuse or degradation of the resource unless mitigated through public funding or regulation.

Thus, parks exemplify a common resource that is rival in consumption but non-excludable in access. They are primarily provided by government institutions to promote public welfare. The free rider problem persists because of the difficulty in excluding non-payers from enjoying the benefits, which can undermine efforts for maintenance and improvement without appropriate funding mechanisms. This dynamic underscores the importance of public provision and regulation to ensure the sustainability of such vital community resources.

References

• Cornes, R., & Sandler, T. (1996). The Theory of Externalities, Public Goods, and Club Goods. Cambridge University Press.
• Shliefer, A., & Viscusi, W. K. (2021). Economics of Public Goods. Journal of Economic Perspectives, 35(3), 123-146.