Excludability
Excludability is a term used in economics to describe the ability of a producer to prevent people from consuming a good or service without paying for it. It is a key concept in the study of public goods, which are goods or services that are non-rivalrous and non-excludable. Excludability is the opposite of non-excludability, which is the inability to prevent people from consuming a good or service without paying for it.
History of Excludability
The concept of excludability was first introduced by economist Ronald Coase in his 1960 paper, “The Problem of Social Cost.” In this paper, Coase argued that the cost of preventing people from consuming a good or service without paying for it should be taken into account when determining the price of a good or service. This concept has since been used in the study of public goods and services, and has been used to explain why some goods and services are provided by the government while others are provided by the private sector.
Comparison of Excludability
| Good/Service | Excludability |
|---|---|
| Movie Ticket | High |
| National Park | Low |
| Broadcast TV | Low |
| Internet Access | High |
Summary
Excludability is a term used in economics to describe the ability of a producer to prevent people from consuming a good or service without paying for it. It is a key concept in the study of public goods, which are goods or services that are non-rivalrous and non-excludable. Excludability is the opposite of non-excludability, which is the inability to prevent people from consuming a good or service without paying for it. For more information on excludability, please visit the websites of the World Bank, the International Monetary Fund, and the Organization for Economic Cooperation and Development.
See Also
- Non-Excludability
- Public Goods
- Rivalrous Goods
- Free Rider Problem
- Tragedy of the Commons
- Externality
- Marginal Cost
- Marginal Benefit
- Price Discrimination
- Market Failure
