Quasi public goods
|Quasi public goods|
Quasi-public goods are economic goods and services that are provided by private or public entities, but are available to the general public in some form. These goods and services often benefit society as a whole, and are often provided by a combination of public and private entities. Examples include public infrastructure, transportation, education, health care, and various social services. Quasi-public goods are typically characterized by their cost structure, which includes some element of cost recovery, and their availability, which depends on the ability of the provider to generate revenue. Management of these goods and services often requires an understanding of the complex relationship between public and private entities, and how they interact to deliver these goods and services.
Example of quasi public goods
- Public transportation: Many public transportation systems are funded by both public and private entities. Generally, public transportation is planned and operated by public agencies, but operated by private companies. Private companies may provide services such as buses, light rail, monorail, or commuter rail. Private companies may also be contracted to operate ferries, subways, and other transportation services.
- Parks and recreation: Parks and recreation areas are often managed by both public and private entities. Generally, public parks are owned and operated by local, state, or federal governments, while private companies may manage recreational activities and facilities within the park. Private companies may also provide educational programs and services, such as camping and outdoor activities.
- Education: Education is usually provided by public and private entities. Public schools are typically funded and operated by state and local governments, while private schools are funded through tuition and fees. In addition, private companies may provide educational services, such as tutoring, online classes, and after-school programs.
- Health care: Health care is typically provided by both public and private entities. Public health care systems, such as Medicare and Medicaid, are typically funded and operated by governments. Private companies may provide health care services through health insurance plans, hospitals, and clinics. Private companies may also provide specialized services, such as home health care and long-term care.
When to use quasi public goods
Quasi-public goods can be used in a variety of situations, including:
- Providing public infrastructure, such as roads, bridges, airports, and public transportation.
- Delivering public services such as health care, education, and social services.
- Establishing regulatory systems, such as labor laws and environmental regulations.
- Encouraging private-public partnerships to develop new technologies, such as renewable energy and clean water.
- Stimulating economic development, such as through tax credits and public-private investment funds.
- Facilitating the efficient use of resources, such as through public-private partnerships to manage water and energy use.
- Establishing a pricing system that allows the public to benefit from the use of scarce resources, such as spectrum auctions.
- Enhancing public safety, such as through the provision of public safety services and emergency response systems.
- Creating incentives for private investment in areas of public need, such as affordable housing and public transportation.
Advantages of quasi public goods
Quasi-public goods have many advantages, as they provide services to the public while allowing private entities to benefit from their production. These advantages include:
- Increased economic efficiency, as private entities can produce goods and services more efficiently than public entities.
- Greater access to goods and services, as private entities can provide goods and services to a wider range of people.
- Improved public services, as private entities are incentivized to provide quality services to the public.
- Reduced cost burden for the public, as private entities can spread the costs of production over a larger pool of users.
- More transparent and accountable services, as private entities are subject to market forces and must compete for the public's patronage.
- Increased innovation, as private entities have greater flexibility to experiment and innovate with new services.
- Increased funding for public services, as private entities often provide additional funding to public services.
Limitations of quasi public goods
Quasi-public goods come with certain limitations that should be understood before investing in them. These limitations include:
- The cost structure of quasi-public goods can be difficult to manage, as it usually requires some form of cost recovery from private entities or public subsidies.
- The availability of these goods and services is often restricted by the ability of the provider to generate revenue, meaning that certain areas may not have access to them.
- Management of these goods and services can be complex due to the nature of the public-private relationship and the need to effectively balance the interests of both parties.
- Quasi-public goods may not always be able to meet the needs of all citizens, and they may also not be able to provide the same level of quality as other goods and services.
- Quasi-public goods may not be able to respond quickly to changes in demand, as the decision-making process can be slow and bureaucratic.
- Carson, R. T., Flores, N. E., Martin, K. M., & Wright, J. L. (1996). Contingent valuation and revealed preference methodologies: comparing the estimates for quasi-public goods. Land economics, 80-99.
- Chambers, C. M., Chambers, P. E., & Whitehead, J. C. (1998). Contingent valuation of quasi-public goods: Validity, reliability, and application to valuing a historic site. Public Finance Review, 26(2), 137-154.
- Chen, Q., Wang, C., Lou, G., Zhang, M., & Wu, S. (2019). Measurement of urban park accessibility from the quasi-public goods perspective. Sustainability, 11(17), 4573.