Thursday, 19 March 2009

Public goods for frogs

In a strange posting at the Frogblog on wages in universities, Metiria Turei shows the problems that can occur by not doing economics at university. Metiria writes
Meanwhile the government is looking to further reduce its contribution to what is undoubtably a public good, as well as private benefit. (Emphasis added)
Unfortunately education isn't a public good. For the record, a public good is a good which is non-rival and non-excludable. Put simply this means that the consumption of the good by one individual does not reduce the amount of the good available for consumption by others and no one can be effectively excluded from using the good. Clearly this definition fails for education, as it is easy to exclude people from receiving it, for example.

I wonder if merit good is meant rather than public good?

11 comments:

Crampton said...

Some would even argue that it confers negative externalities via signaling....

TStockmann said...

You need to analyze second order effects in deciding whether it is a public good using that criteria.

Nigel Kearney said...

I think she just means it has benefits for people other than the one receiving the education. To be fair, that is probably what most of the public would understand by 'public good'.

Paul Walker said...

Nigel: That is why I think she means merit rather than public good.

Bishop Hill said...

I once came across someone who said that education was non-excludable because it was compulsory.

I don't suppose they'd studied economics either.

Solocypher said...

I didn't study economics either, and your definition led argument that leads you to assert that education is not a public good is very confusing. Surely the 'exclusion' rule could be used when talking about any good?

Anonymous said...

@Solocypher

A public good is more like a water fountain. You can be excluded from education because of your intelligence or financial situation.

Paul Walker said...

Bishop Hill: Two points,1) not all education is compulsory and 2) you can be excluded even from compulsory education, eg you can be expelled from school.

Paul Walker said...

Solocypher: For most goods you are right, you can be excluded. But for public goods you can't. Think of defence for example. If the army is defending you it has to defend everybody else in the country as well. You can't really exclude anyone from defence. Think of the light from a lighthouse, if one ship can take advantage of it then all ships can do so. You can't exclude any ships.

bradtaylor said...

This is a particularly bad example of the misuse of 'public good'.

Paul Walker said...

Brad, you are not wrong. No way is ACC a public good or even, for the public good.