Learn something new every day
More Info... by email
Private goods are those goods that are intended for consumption by the owners of those acquired goods. This is different from a public good, which provides some sort of benefit and utility to a wider range of people. With a private good, the focus is on the benefits that the individual obtains after purchasing the product from a supplier or manufacturer. Just about any type of private good is manufactured as a means of making a profit.
Two characteristics are usually present with any type of private good. One has to do with the matter of exclusivity. The owner of that good has complete control of who may benefit from the use of the product, or even in anyone receives some sort of benefit. At the same time, a second characteristic has to do with consumption of the product in a manner that precludes anyone other than the owner receiving any type of direct or indirect benefit from the good.
One of the easiest ways to understand the concept of a private good is to consider two examples of these types of products. When a consumer purchases a hamburger, he or she becomes the owner of that product. At that point, the owner may determine to consume the entire burger personally, an event that effectively excludes anyone else from benefiting from the product. The owner may also choose to share a portion of the burger with one person while denying access to the product by another person, In both situations, the owner decides who, if anyone, has access to the product and whether or not anyone other than the owner receives some sort of benefit from the good.
Along with food, there are other examples of private good ownership that effectively allow the owner to control access to a good. Automobiles are a common example, since the owner decides who is and is not allowed to operate the vehicle, or even who is allowed to ride in one of the passenger seats. Clothing is also a private good, with the owner either wearing the purchases exclusively, or having direct control over who else is allowed to borrow any of the clothing. Even goods like personal electronics fall into this category, with owners determining who gets to listen to CD players, use Internet tablets, or borrow laptops. In all these scenarios, the owner assumes control of the private good and is free to make use of it in any way he or she sees fit.
One of our editors will review your suggestion and make changes if warranted. Note that depending on the number of suggestions we receive, this can take anywhere from a few hours to a few days. Thank you for helping to improve wiseGEEK!