Samuelsonian and Weisbrodian Public Goods

Abstract

Pure public goods, as defined by Paul Samuelson, are well understood. However, Burton Weisbrod argues that a substantial number of private goods have public good attributes. Among the goods mentioned by Weisbrod are visits to a park or hospital. These goods have two important attributes: uncertainty in consumption and substantial time and other costs associated with changing capacity to produce them. The question is: How do these public-type goods differ from Samuelsonian public goods? The analysis is based on a social welfare function whose arguments are the individual utilities of the members of society. Each member of society is assumed to gain utility from a private good for which he or she has an uncertain demand and from another private good. Individual endowments can be used to produce the private good or the capacity to enjoy the good for which demand is uncertain. Capacity, once produced, is available to all. Under these conditions, Weisbrodian public goods differ from Samuelsonian public goods and from pure private goods. It is shown, however, that a discriminating monopoly may provide the efficient level of capacity.