ABSTRACT
By now a vast literature has developed on the welfare economics of public-enterprise pricing. 1 This literature seeks to specify rules for setting prices that public enterprises should follow if they are efficiently to promote consumer welfare. User charges are themselves a form of public-enterprise price, for they too represent prices charged by government for services it provides. A charge imposed on boat owners by the Coast Guard, and declared to be a fee for services rendered, is as much a public-enterprise price as is a charge imposed by a public electric company. Hence the literature on public-enterprise pricing is fully applicable to user charging, as are the controversies and problems associated with that literature.
