Verbull Word of the day
Finance glossary

Public Good

Economics · intermediate
Definition

Something one person's use does not diminish and from which others cannot easily be excluded.

A public good — national defence, street lighting, clean air, basic research — is non-rival and non-excludable, so private markets underprovide it: everyone benefits whether or not they pay, so no one wants to pay. That free-rider problem is the standard economic argument for funding such things through taxation.

In a sentence

Street lighting is a public good, since nobody can be billed for walking under it.

Play today's puzzle →
Verbull app icon
Get a word like this every morning
Word of the Day on your Home Screen, with quizzes and flashcards. Get the app →