The term "public bad" is sometimes used for "goods" which, like public goods, are non-excludable and non-rival, but which tend to lower rather than raise welfare. Air pollution is an example.

For a public good, non-excludability is normally taken to mean that the provider of the good is unable to exclude individuals from benefiting from the good . It can normally be assumed that individuals would not want to exclude themselves from benefiting.

For a public bad, however, individuals will want to exclude themselves (if they can do so at reasonable cost) and it would seem that non-excludability could mean either or both of the following:

  1. The provider of the bad (eg a factory causing air pollution) is unable to exclude individuals from the bad.
  2. Individuals (eg living in a polluted neighbourhood) are unable to take protective measures to exclude themselves from the bad.

The case of noise from aeroplanes illustrates the distinction. Airlines are unable to exclude residents (in affected areas) from receiving noise. But residents can, at a cost, take measures such as double glazing to keep the noise out of their homes or at least mitigate it.

Question: Where the term "public bad" is used in economics, is there a consistent understanding of what is meant by non-excludability?

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    $\begingroup$ +1. However, I believe it will be difficult to find an answer as public bads are almost exclusively discussed as a negative externality by economists in most cases, which ignores issues of non-excludability, or more so, non-excludability is irrelevant to the discussion of negative externalities (at least mostly if not entirely). $\endgroup$
    – BB King
    Commented Sep 16, 2019 at 1:47


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