Differentiated Public Goods: Privatization and Optimality

Nicholas Economides () and Susan Rose-Ackerman

Chapter 6 in Does Economic Space Matter?, 1993, pp 111-132 from Palgrave Macmillan

Abstract: Abstract Many commentators criticize centralized government production of public goods for not providing sufficient variety. Citizens with widely varying tastes all consume the same type and level of services. With fixed costs of production and variations in tastes and incomes, an efficient solution, familiar in the public finance literature, can be generated by a single government producer that supplies the public good and charges citizens different tax prices to take account of the variations in their tastes and incomes.1 This solution, while efficient, is not feasible. Citizens have, in general, no incentive to reveal their willingness to pay, and recent advances in demand-revealing processes have not produced entirely satisfactory solutions.2 In addition, if citizens’ tastes diverge sharply enough and if production costs are low enough, efficient solutions may also exist with several suppliers each producing a different variety of output for a subset of citizens.3,4

Keywords: Public Good; Private Firm; Fixed Cost; Social Optimum; Total Surplus (search for similar items in EconPapers)
Date: 1993
References: Add references at CitEc
Citations: View citations in EconPapers (11)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Working Paper: Differentiated Public Goods: Privatization and Optimality (1992)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-22906-2_7

Ordering information: This item can be ordered from
http://www.palgrave.com/9781349229062

DOI: 10.1007/978-1-349-22906-2_7

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().