A Comment on the Role of Prices for Excludable Public Goods

26 Pages Posted: 25 Sep 2006 Last revised: 3 Jul 2007

See all articles by Gilbert E. Metcalf

Gilbert E. Metcalf

Tufts University - Department of Economics; National Bureau of Economic Research (NBER)

Jongsang Park

University of Michigan at Ann Arbor - Department of Economics

Date Written: September 2006

Abstract

Blomquist and Christensen (2005) argue that welfare is initially decreasing in the price of an excludable public good and that the case for a positive price for an excludable public good price is weak. We argue that this result follows from their particular characterization of the public good and that an alternative and equally reasonable characterization overturns their result. Hence the policy case for a positive price on the public good is stronger than Blomquist and Christiansen suggest. We also provide a flexible characterization of public goods that nests a wide variety of public goods models.

Suggested Citation

Metcalf, Gilbert E. and Park, Jongsang, A Comment on the Role of Prices for Excludable Public Goods (September 2006). NBER Working Paper No. w12535. Available at SSRN: https://ssrn.com/abstract=931377

Gilbert E. Metcalf (Contact Author)

Tufts University - Department of Economics ( email )

Medford, MA 02155
United States
617-627-3685 (Phone)
617-627-3917 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Jongsang Park

University of Michigan at Ann Arbor - Department of Economics ( email )

611 Tappan Street
Ann Arbor, MI 48109-1220
United States

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