哈维罗森 财政学 第六版 Chap04 Public Goods

1,Chapter4-PublicGoods,2,PublicGoodsDefined,PurepublicgoodssharetwocharacteristicsNonrivalCostofanotherpersonconsumingthegoodiszeroNonexcludableVeryexpensivetopreventothersfromconsumingthegood,3,Examplesofpublicandprivategoods,PublicGoodsNationaldefenseHousecleaninginanapartmentwithmanyroommatesFireworksdisplayMusicfilesharingUncongestedfreeway,PrivategoodsPizzaHealthcareCongestedfreewayPublichousing,4,Valuationofpublicgoods,EveryoneconsumessamequantityofpublicgoodMarginalbenefitofpublicgoodvariesbypersonInthehousecleaningexample,differentroommatesvaluethecleanapartmentdifferently.,5,Impurepublicgoods,Mostgoodsthatarethoughtofaspublicgoodsmaynotstrictlysatisfythenonrivalornonexcludableassumption.Ascenicviewisapublicgoodwithoutcongestion,butthequalitydiminishesasmorethenumberofsightseersincreases.Thus,ascenicviewbecomesrival.,6,Privategoodscanbeprovidedbythepublicsector,Thesearecalled“publiclyprovidedprivategoods.”Keycriteria:isthegoodrivalandexcludable?Publichousingisrival(onefamilyconsumesoneapartment)andexcludable(easytopreventconsumption).,7,Efficientprovisionofprivategoods,DerivationofaggregatedemandEachpersonsdemandcurverepresentsthewillingness-to-payforanadditionalunitofagood.Privategood:holdingPconstant,addtogetherindividualquantitiestogetQ.Horizontalsummation,Figure4.1,9,Equilibriuminprivategoodsmarket,Equilibriumwheresupplycurveintersectsaggregatedemandcurve.Everyonepaysthesameprice,P.Individualsconsumedifferentquantities,Q.Paretoefficient.,10,Efficientprovisionofpublicgoods,Considerafireworksdisplayasapublicgooditisnonrivalandnonexcludable.Biggerdisplaysgivehigherbenefit.Publicgood:holdingQconstant,addtogetherindividualwillingness-to-paytogetP.Verticalsummation.,Figure4.4,12,Efficiencyinpublicgoodsmarket,Everyoneconsumesthesamequantity,QIndividualsmarginalbenefitvaries.Efficiencyrequiresthatthesumofindividualmarginalbenefitsequalsthemarginalcost.,13,Numericalexample,Consider2individuals,AdamandEvewhohavethefollowinginversedemandcurves,andfaceamarginalcostcurvebelow.,14,Numericalexample,privategood,Ifthegoodwasaprivategood,thentheaggregatedemandcurveis:,Withaprivategood,everyonepaysthesameprice.,15,Numericalexample,privategood,Inacompetitivemarket,P=MC,Approximately133unitsoftheprivategoodareprovidedatapriceof$88.Adamconsumesaround22unitsandEveconsumesaround111units.,16,Numericalexample,publicgood,Supposeinsteadthatthegoodisapublicgood.Theaggregatedemandcurveis:,Withapublicgood,everyoneconsumesthesamequantity.,17,Numericalexample,publicgood,Efficientprovisionwouldrequire:P=MC,EfficientprovisionwouldimplythatAdam&Eveconsume138.46unitsofthepublicgood.Privatemarketmaynotarriveatthisallocation,however.,18,Efficientallocationsofpublicgoods:Problems,Althoughacompetitivemarketwillprovideprivategoodsefficiently,willthesamebetrueforpublicgoods?Peoplemayhaveincentivestohidetheirtruepreferencesforapublicgood.IfAdamcangetEvetopayforthepublicgood,hecanusehisincomeforotherpurposesandstillenjoythepublicgood.,19,Problems,continued,Thisincentivetoletotherspayforthepublicgoodwhilestillenjoyingthebenefitsisknownasthe“freeriderproblem.”Theprivatemarketmaythereforefallshortofprovidingtheefficientamountofthepublicgood.,20,Problems,continued,Thisincentivetofreerideoccursbecausethepublicgoodisnonrivalandnonexcludable.Apersongetstoconsumethegoodevenifhedoesnotpayforit.,21,Problems,continued,Returntothepublicgoodsnumericalexample.SupposeAdamchoosestofreeride,andEvethereforeprovidesheroptimalamount.Evechooses:,AfterEvecontributes120unitsofthepublicgood,Adamdoesnotprovideanyadditionalcontributions,becausethemarginalbenefittoAdamofthe120thunitislessthanthemarginalcost.,22,Solutionstothefreeriderproblem,Governmentinterventioncanpotentiallyleadtoamoreefficientoutcome.Governmentcanusecoercivepowertoforcepeopletopayforpublicgoods,throughtaxation.Freeridingisnotafact,however.Thereareinstanceswhenindividualsdoactcollectivelywithoutcoercion.Laboratoryexperimentsoncollegestudentscontradictthenotionthatfreeridingwillleadtozerocontributionsforthepublicgood.Somesuggesttheresultsderivefroma“warmglow”ofgiving.,23,Privatizationdebate,Privatizationmeanstakingservicesthataresuppliedbythegovernmentandturningthemovertotheprivatesectorforprovisionand/orproduction.Exampleswithcompetingpublic/privateprovisionincludepolicing,parks,andeventhejudicialsystem.,24,Privateprovision,Mixofprivateandpublicprovisiondependson:Relativewageandmaterialscosts:Whichsectorislessexpensive?Administrativecosts:Canthesefixedcostsbespreadoveralargegroupofpeople?Diversityoftastes.Privateprovisionismoreefficientwithdiversetastesbecausepeoplecantailortheirconsumptiontotheirowntastes.Distributionalissues.Notionsoffairnessmayrequirethatsomecommoditiesareavailabletoeveryonesuchaseducationorhealthcare.,25,Privateproduction,Evenifthereisagreementthatthepublicsectorshouldprovideagood,itisnotclearwhetherthepublicsectorshouldproduceit.Airportsecurityworkersareatimelyexample.Publicsectormanagersmaynothaveastrongincentivetocontrolcostsbecauseofthelackofprofitmotiveorfearsoftakeoversorbankruptcy.Qualityofpublicservicesmaybehigher,however.Thisismorerelevantwhencontractsareincomplete.,26,Educationprovision,Governmentspendsapproximately$400billiononeducationannually.Whysuchextensiveintervention?Educationprimarilyaprivategood.Someefficiencyconcernssocialization,politicalstability.Equityconcernsaccesstoeducationincreasessocialmobility.Elementaryandsecondaryeducationissubsidized,compulsory,andproducedbythegovernment.Thiscannotberationalizedonefficiencygroundsalo