Question 6 (a)

Public goods versus common resources, and why education is not a pure public good

6 marks

Time to write: About 12 minutes
Topic: Public goods and common resources

Question

Question 6 (a) · 6 marks

Explain the difference between public goods and common resources. Explain why Education is not regarded as the pure public goods?

Reworded from the university paper; the task is the same. The original paper belongs to the University of Delhi. See DU's question bank.

Before you write

Read off the question and its marks

12 minfor 6 marks

Read from the question

Explain…Explain…?Two asks in one question: answer both.
difference betweenSet the differences out in a table, basis by basis, not as two separate essays.

Write it in this order

Read; underline the asks; jot your points 1 min
1 The two properties, excludability and rivalry 1 mark 2 min
2 Difference between public goods and common resources, with their problems 2 marks 3 min
3 Examples of each 1 mark 2 min
4 Education: excludable and rival, so not a pure public good 2 marks 3 min
Check: every ask answered, key terms underlined 1 min

1234

Short on time? Trim steps 2 and 4 evenly rather than skip one: each is capped at its own marks.

Try it first. About 12 minutes for 6 marks. Write it out, then open the solution.

Solution

Hover or tap a marked figure, like 72,000, to see how it is made and where else it appears.

Two tests for classifying goods. Goods are sorted by two properties:

Excludability: whether people who do not pay can be kept from using the good. A good is non-excludable when keeping anyone out is extremely hard, or possible only at an extremely high cost.
Rivalry: whether one person's use reduces the quantity left for others. A good is non-rival when it does not.

A good that is both excludable and rival is a private good; one that is non-excludable and non-rival is a pure public good.

Public goods and common resources compared. Both are non-excludable, so they differ only on rivalry.

Basis	Public good	Common resource
Excludable?	No	No
Rival in use?	No: my use leaves as much for you	Yes: what I use is not left for you
Problem it creates	Free riding: people enjoy it without paying, so the market supplies too little	Over-use: each user ignores the harm to others, so it is used beyond the efficient level, the tragedy of the commons
Externality behind it	Positive	Negative
Usual remedy	Provision by the government, judged by comparing total benefit with total cost	Clearly defined property rights, giving someone the power to exclude

Examples. Our own.

Public good: a free-to-air cyclone warning broadcast on radio along the Odisha coast. No listener can be shut out, and one family hearing it does not weaken the warning for the next.
Common resource: the groundwater under a Punjab village, drawn by every farmer's tubewell. Water one farmer pumps is not available to his neighbours (rival), yet no farmer can easily be stopped from sinking a well (non-excludable), so the water table keeps falling.

Why education is not a pure public good. Applying the two tests, education fails both:

It is excludable. A school, college or coaching institute can admit only those who pay the fee or meet its entry conditions, and turn others away. Excluding non-payers is practical and cheap here, unlike for a cyclone warning.
It is rival. A classroom has a fixed number of seats and a teacher has limited time. In a Delhi University college, a seat given to one student is a seat another applicant does not get, and a crowded class gives each student less attention.

So education has the two properties of a private good, not of a pure public good. That the government often provides it, free or at low fees, does not change this: whether a good is public depends on these properties and on whether non-payers can be excluded, not on who supplies it, and the dividing lines between the categories are not fixed. An online lecture open to all, before the server is congested, comes closer to being non-rival, but a fee or login can still exclude.

Conclusion. Public goods and common resources are both non-excludable, but a public good is non-rival and is under-supplied through free riding, while a common resource is rival and is over-used. Education is both excludable and rival, so it is not a pure public good, even when the state provides it.

Where the 6 marks sit

#	Component	Marks
1	The two properties, excludability and rivalry	1
2	Difference between public goods and common resources, with their problems	2
3	Examples of each	1
4	Education: excludable and rival, so not a pure public good	2
	Total	6

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