The Frontier Goods & Services Interactive InfoMap

Frontier’s interactive goods map illustrates different kinds of goods according to the theory of public and private goods.

This theory holds that all goods and services have inherent properties of being either rivalrous or non-rivalrous, and either excludable or non-excludable.

Rivalrous goods are goods where one person’s consumption takes away from another’s, so food is a rivalrous good because once a piece of food is eaten it is no longer available for anyone else. Radio transmissions are non rivalrous, because many people can tune into a transmission without affecting each other.

Excludable goods are goods where it is possible to exclude people who refuse to pay for a good from its benefits. It is easy to exclude people from consuming household electronics, (theft aside) they cannot be accessed without payment. It is very difficult, however, to exclude people from the benefits of lighthouses.

Putting rivalry and exclusion together there are four logical combinations:

Private Goods –Excludable and Rivalrous (e.g. food)

Public Goods –Non-Excludable and Non-Rivalrous (e.g. lighthouses)

Toll Goods –Excludable and Non Rivalrous (e.g. telephone networks)

Common Pool Goods –Non-Excludable and Non-Rivalrous (e.g. fish in the sea)

No real life goods are quite 100% or 0% rivalrous or excludable. By passing your cursor over the map you will see examples of real goods. Their location on the map shows what kind of good the are depending on their rivalry and exclusion.

These classifications have important public policy implications. Generally speaking:

Governments should not be involved in private goods because their excludability means they can be funded privately and their rivalry creates sharing problems if governments try to allocate them politically.

Governments may have a role in providing public goods because their non-rivalry makes them easy to share and their non excludability means people may take the benefits and refuse to pay unless they are taxed. (However, economist Ronald Coase famously pointed out that many light houses have been built charitably, so government action is not essential to provide public goods).

Governments may need to regulate toll goods, because the combination of non rivalry and non excludability means incumbent providers can charge high prices for additional services that cost little to produce, then drop those prices to sink any competitors who try to offer alternative services.

Governments may need to enforce restrictions or quotas on people using common pool goods because the combination of non-excludability and rivalry mean that people face no cost for taking as much as they like, but the resources run out. Fishing quotas in Iceland have been an excellent example of governments dealing with the common pool problem.”

Click here to access this Goods & Services Interactive InfoMap.

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The Frontier Centre for Public Policy

is an independent public policy think tank whose mission is "to broaden the debate on our future through public policy research and education and to explore positive changes within our public institutions that support economic growth and opportunity."