User pays

From Wikipedia, the free encyclopedia

User pays is a pricing approach based on the capitalist idea that the most economically efficient allocation of resources occurs when consumers pay the full cost of the goods that they consume. In Australian politics the phrase "user pays" has often been used by governments as a justification for why something will no longer be unconditionally provided out of government revenue.

In the case of public goods, there is no definable cost of providing the good to each consumer, and so the transition to a market-based "user pays" system may actually decrease efficiency.