What is a Public Good?

Definition: A Public Good is an item, either a good or service, that is used, consumed or enjoyed by a society as a whole. In other words, all the society’s participants are entitled to it.

What Does Public Good Mean?

A Public Good (or service) is an economic term that refers to items that are fully available and distributed throughout the social structure. These goods are easily identifiable because they are part of our everyday lifes, e.g. a bench in a park. Public goods (and services) are paid trough taxes imposed on both corporations and individuals. There are two crucial elements for a good or service to be identified as public; these are non-rivalry and non-excludability. The non-rivalry principle states that if an individual consumes the good, the good must remain fully available for the rest of the society.

The other principle, non-excludability, refers to the full society participation on the benefits that the good or service provides, no strings attached. Nonetheless, public goods have a disadvantage. It is a phenomenon called the free-rider problem. Basically, this issue explains the possibility for someone who’s not willing to pay its tax duties to continue to enjoy these goods and services even though the individual or business is not currently paying for them.

Let’s have a look at a practical example.


Mr. Hemsy is a 49 years old individual living in New Jersey. He has a wife, 2 sons and a dog. He normally takes his dog for a walk at 6am before going to work and he has some routines like walking by the park, letting his dog run through it while he sits on a bench to read and then he comes back to his house to get his kids ready for school. Mr. Hemsy enjoys some public goods and services while he does this. For example, at 6am it is still dark, so he enjoys street lights.

On the other hand, he also uses sidewalks, public roads and the park, which are also public goods. He also uses trash cans, park benches, light signals, among many other different elements. This is an illustration of how public goods look like in practice.