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Tuesday, January 12, 2010

Which public services are actually public?

One of the concepts that I think is hard for students to grasp because of the terminology is the concept of 'public goods'. Students know that certain goods and services are publicly-provided but have a hard time making the distinction between goods that are truly non-rival and non-excludable, and goods that the government has decided will be provided to everyone. Last semester, when I asked my students to identify a public service that is provided because of issues with non-rivalry and/or non-excludability, a large number used fire services, saying things like, "if your house is on fire, the fire department has to come put out the fire, they can't exclude individual houses."

But this morning, I saw a news story that may help clarify this distinction. A municipality in San Diego county is considering charging for rescue services provided to non-residents who get into car accidents:
"You would be charged if you were the cause of a traffic accident or are required our services for a rescue, based on the actual cost for services," said San Miguel Fire District Chief August Ghio.

The fees range from $390 to more than $2,000. If there is a car fire or gasoline is spilled, the charge could be $570. If a helicopter is needed, $2,100 may be charged.
I think the idea that they could do this would be eye-opening for a lot of students...

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