Private Good

In economics Private good is an opposite of the public good. Its main features are:
  • excludability (also referred in this context as rivalry) - cannot be consumed by everybody since consumption by one person reduces or excludes consumption by another
  • depletability (it is finite)
Private goods are almost exclusively made for profit. An example of the private good is bread: there is a finite amount of it, and bread eaten by a given person cannot be consumed by another. One of the most common way of looking at goods in economy, illustrated in the table below, is the classic division based on:
  • is there a competition involved in obtaining a given good
  • whether it is possible to exclude a person from consumption of a given good
Classic division of goods in economy Exclusion from consumption
YES NO
Competition in consumption YES
private good: food, clothing, toys, furniture, cars
common good: natural environment
NO
club good: private schools, cinemas, clubs,
public good: national security (army and police forces)

 

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