ABSTRACT
In the economist’s dictionary, widgets are defined as private goods because they are divisible and separable. If you buy a widget and use it, that same widget does not at the same time render a service to me. If you buy and eat an apple, you cannot again buy and eat that same apple. Such goods are easy for the private sector to produce and market because they come in distinct, divisible units and can be sold to distinct, divisible buyers. Should you, however, go and buy cleaner air, for example, in the city where you and I reside-say, by paying industries to clean up-then the services of that clear air are at the same time available to me, even though I didn’t pay anything for them. Such goods are called public goods because their units are not divisible and distinct. Their services are available to many people at the same time, including those who don’t pay for them, and unlike private goods the use of their services by one person does not diminish their availability to others. Private markets are very bad at producing such goods; indeed, there usually is no private economic incentive to produce them at all because, although many people could benefit from them, no single individual has a sufficient incentive to pay for them (USEPA, 2014d).
