Private good

From Wikipedia, the free encyclopedia

A private good is defined in economics as a good that exhibits these properties:

  • Excludable - it is reasonably possible to prevent a class of consumers (e.g. those who have not paid for it) from consuming the good.
  • Rivalrous - consumptions by one consumer prevents simultaneous consumption by other consumers. Private goods satisfies an individual want while public good satisfies a collective want of the society.

A private good is the opposite of a public good, as they are almost exclusively made for profit.

An example of the private good is bread: bread eaten by a given person cannot be consumed by another (rivalry), and it is easy for a baker to refuse to trade a loaf (excludable).

One of the most common ways of looking at goods in the economy, illustrated in the table below, is the classic division based on:

  • is there a competition involved in obtaining a given good?
  • is it possible to exclude a person from consumption of a given good?
Excludable Non-excludable
Rivalrous Private goods
food, clothing, toys, furniture, cars
Common goods / (Common-pool resources)
water, fish, hunting game
Non-rivalrous Club goods
cable television
Public goods
national defense, free-to-air television, air
Private and public goods
Types of goods

public good - private good - common good - common-pool resource - club good - anti-rival goods

rivalrous good and non-excludable good
complement good vs. substitute good
free good vs. positional good

(non-)durable good - intermediate good (producer good) - final good - capital good
inferior good - normal good - ordinary good - Giffen good - luxury good - Veblen good - superior good
search good - (post-)experience good - merit good - credence good - demerit good - composite good