tag:blogger.com,1999:blog-6598831864333990375.post7920870593215887363..comments2023-05-08T04:01:34.561-08:00Comments on Students Who Enjoy Economic Thinking: fees and taxes, they are all the sameAdam Levyhttp://www.blogger.com/profile/15257124483756325652noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-6598831864333990375.post-37097029295166845042011-11-19T16:11:08.688-09:002011-11-19T16:11:08.688-09:00I think you must make a difference between a publi...I think you must make a difference between a public good and externalities. It seems to me that most of your examples are examples of public goods. Public goods that are non-excludable (and non-rival, when we talk about pure public goods). The idea behind those fees or taxation is that because they are non-excludable people have no incentives to pay for them, therefore, in the extreme case, the market will not produce the good or underproduce the good. Therefore, the solution is to tax people or impose a fee on students. The fees you are being imposed are theoretically imposed upon you because they are "public goods." There are obviously many examples where actually these goods that the market would not provide because they are non-excludable are actually being provided by the market. Ronald Coase wrote a famous essay called "The Lighthouse in Economics" (Journal of Law & Economics, 1974, Volume 17, No. 2, pp. 357-376) showing that historically some lighthouses were owned privately despite the economic theory arguing that the lighthouse is an example of public good. <br />The question that one should ask is "are the benefits provided by these public goods exceed the costs of provided these public goods via taxation or fees including the opportunity cost?" I can't pretend I have read all the economic literature but I can't remember any analysis trying to answer that question. Most economists just assume that people want these public goods but are not willing to pay for them because other will benefit without paying from it. I think that assumption is a very strong one.Alexandre Padillahttps://www.blogger.com/profile/04077320748857632892noreply@blogger.com