Role of Government in Health Part 2 Public Goods

Summary

In this segment, David Bishai discusses the role of government in health, particularly focusing on public goods and merit goods. Merit goods are under-consumed but deemed desirable by entities like governments, exemplified by education and vaccinations. The script explores concepts like externalities, paternalistic altruism, and the definitions of rival and non-rival goods, excludable and non-excludable goods, leading to the identification of pure public goods. Examples in health include controlling contagious diseases and improving environmental health, emphasizing the importance of government institutions in ensuring public health.

Takeaways

• 🏛 The role of government in health is to address issues related to public goods and merit goods, which are under-consumed but deemed desirable by entities like governments or educators.
• 🧬 Merit goods, such as education, vaccinations, and exercise, are promoted by governments due to their perceived benefits to society, often based on paternalistic altruism.
• 🤔 Paternalistic altruism is the concept where one party, like a government, wants another party to be happy in a specific way, hence providing merit goods instead of cash.
• 🍪 Rival goods are those that can only be consumed by one person at a time, like a cookie, whereas non-rival goods can be enjoyed by multiple people without diminishing the value, like the moon.
• 🚫 Excludable goods are those from which people can be excluded if they haven't paid or met certain criteria, contrasting with non-excludable goods that cannot be withheld from anyone.
• 🌐 A pure public good is defined as non-rival and non-excludable, meaning everyone can benefit from it without preventing others from doing the same.
• 🛑 Examples of public goods in health include controlling contagious diseases like COVID-19, environmental health improvements, and regulation of dangerous consumer products.
• 🏥 The quality of health services in a country is considered a special form of public good, as it benefits the entire population and cannot be withheld from individuals.
• 🔍 The taxonomy of goods includes private goods, club goods, common pool resources, and pure public goods, each with different combinations of rivalry and excludability.
• 🌐 National defense is a classic example of a public good provided by governments, illustrating the concept of excludability within a nation's borders.
• 🌍 There are also global public goods, such as the eradication of COVID-19, which would benefit everyone on the planet and cannot be excludable.
• 💡 The script suggests looking at the PowerPoint notes for additional insights on whether altruistic glow is a local or global public good, indicating further exploration of public goods concepts.

Q & A

What is the main focus of David Bishai's segment?

The main focus of David Bishai's segment is the role of government in health, specifically discussing public goods and merit goods.

Why are merit goods considered important by governments?

Merit goods are considered important by governments because they are under-consumed by individuals but are judged to be desirable by entities such as the government, which may have reasons like externalities or the need for a healthy population.

What is an example of a merit good mentioned in the script?

Examples of merit goods mentioned in the script include education, vaccinations, and exercise.

What is the rationale behind providing merit goods?

The rationale behind providing merit goods is paternalistic altruism, where person A wants person B to be happy in the exact manner defined by person A, hence providing a specific good rather than cash.

What is the difference between a rival good and a non-rival good?

A rival good is one that can only be consumed by one person at a time, like a cookie. A non-rival good is one where consumption by person A does not affect the consumption by person B, such as the ability to look at the moon.

What are excludable goods and how do they differ from non-excludable goods?

Excludable goods are those for which it is possible to exclude people from enjoying them, such as through enforcing private property rights. Non-excludable goods, on the other hand, are those from which it is not possible to exclude people, like the moon.

Define a pure public good according to the script.

A pure public good is defined as a good that is non-rival and non-excludable, meaning that everybody can enjoy it and it is not possible to stop anybody from enjoying it.

What are some examples of public goods in health mentioned in the script?

Examples of public goods in health mentioned in the script include controlling contagious diseases like COVID-19, controlling environmental health threats, regulating dangerous consumer products, and improving the safety of roads.

How does the script differentiate between private goods, club goods, common pool resources, and pure public goods?

Private goods are rival and excludable, like a cheeseburger. Club goods are non-rival but excludable, such as a cable TV network. Common pool resources are rival but non-excludable, like a trout stream. Pure public goods are non-rival and non-excludable.

What is the role of government in providing public goods as discussed in the script?

The role of government in providing public goods, as discussed in the script, is to create excludability clauses and ensure that citizens enjoy the public goods of the country, such as national defense.

What is the script's perspective on global public goods?

The script suggests that there are global public goods, such as the eradication of COVID-19, which would benefit everyone on the planet and cannot exclude anyone from its benefits.

Outlines

00:00

🏥 The Role of Government in Health: Public and Merit Goods

David Bishai introduces the segment on the government's role in health, focusing on public goods and merit goods. He explains that governments intervene in health to address issues related to these goods. Merit goods are under-consumed by individuals but are considered desirable by entities like governments or educators. Examples include education, vaccinations, and exercise. The rationale behind promoting merit goods is often paternalistic altruism, where the provider wants the recipient to be happy in a specific way, hence providing them with goods rather than cash. Bishai also defines rival and non-rival goods, excludable and non-excludable goods, and uses these definitions to explain the concept of pure public goods, giving examples such as controlling contagious diseases and environmental health threats.

05:03

🌐 Public Goods Taxonomy and Global Health Perspectives

This paragraph delves into the taxonomy of goods, differentiating between private goods, club goods, common pool resources, and pure public goods based on their rivalrous and excludable properties. Private goods are both rival and excludable, like a cheeseburger or a haircut. Club goods are non-rival but excludable, such as cable TV networks or health maintenance organizations (HMOs). Common pool resources are rival but non-excludable, exemplified by a trout stream. Pure public goods are both non-rival and non-excludable. The government's role in creating excludability is highlighted, with national defense as a classic example of a public good provided by governments. The concept extends to global public goods, such as the eradication of COVID-19, which would benefit everyone on the planet. The paragraph concludes with an invitation to explore additional notes on local versus global public goods and sets the stage for the next section on solving public goods problems.

Keywords

💡Merit Goods

Merit goods are items or services that are considered beneficial for individuals but are underutilized by them. The government or other entities may promote these goods because they believe they contribute positively to society. In the script, merit goods include education, vaccinations, and exercise, which are under-consumed by individuals but are deemed desirable by governments for the overall health and well-being of the population.

💡Externality

An externality occurs when the consumption or production of a good or service affects others beyond the direct consumer or producer. In the context of the video, the externality might be the contagion from a disease, which justifies government involvement in promoting health measures like vaccinations, as it benefits not just the individual but also society by reducing the spread of diseases.

💡Paternalistic Altruism

Paternalistic altruism is a concept where one party, often the government, believes it knows what is best for another and provides them with specific goods or services to ensure their well-being. The script explains this as the government's role in providing merit goods like vaccines or medical assistance, not just giving cash, to ensure citizens' health in a manner defined by the provider.

💡Rival Good

A rival good is one that can only be consumed by one person at a time, as its consumption by one individual diminishes its availability to others. The script uses the example of a cookie, which once eaten by one person, cannot be consumed by another, illustrating the concept of rivalry in goods.

💡Non-Rival Good

Non-rival goods can be consumed by multiple individuals without diminishing the availability to others. The script provides the example of the moon, which can be observed by everyone simultaneously without affecting each other's ability to view it, thus demonstrating the non-rival nature of certain goods.

💡Excludable Goods

Excludable goods are those from which people can be prevented from benefiting unless they meet certain conditions, such as payment. The script mentions that services or goods can be made excludable by enforcing private property rights, allowing providers to exclude non-payers from enjoying the benefits.

💡Non-Excludable Goods

Non-excludable goods are those that cannot be withheld from people, even if they have not contributed to the cost or effort required to provide them. The script uses the example of the moon again, stating that it is impossible to prevent anyone from looking at it, thus highlighting the non-excludable nature of certain goods.

💡Pure Public Good

A pure public good is characterized by being both non-rival and non-excludable, meaning that everyone can benefit from it without diminishing the availability to others, and no one can be excluded from enjoying it. The script cites controlling contagious diseases like COVID-19 as an example of a pure public good in health, as it benefits everyone and cannot be selectively withheld.

💡Club Goods

Club goods are non-rival but excludable goods. The script explains that club goods, like a cable TV network or an HMO (Health Maintenance Organization), allow multiple people to enjoy the same service without competition, but providers can exclude those who do not pay for access, thus combining non-rivalry with excludability.

💡Common Pool Resource

A common pool resource is a rival but non-excludable good, where consumption by one individual reduces the availability for others, yet it is difficult to prevent access to the resource. The script uses a trout stream as an example, where one person catching a trout affects the availability for others, but it is impractical to exclude everyone from the stream.

💡Altruistic Glow

Altruistic glow refers to the positive feeling one gets from helping others, which can be considered a local or global public good depending on the context. The script suggests that while there are local public goods like clean water and healthcare institutions, there are also global public goods, such as the eradication of COVID-19, which would benefit everyone on the planet.

Highlights

David Bishai presents a segment on the role of government in health, focusing on public goods and merit goods.

Merit goods are under-consumed by individuals but are deemed desirable by entities like governments or educators.

Examples of merit goods include education, vaccinations, and exercise, often promoted for societal benefits like health and readiness for military service.

The rationale behind merit goods is paternalistic altruism, where the provider dictates the means for the recipient's happiness.

Rival goods are consumable by one person at a time, such as a cookie, while non-rival goods can be enjoyed by many without affecting others, like the moon.

Excludable goods can prevent non-payers from enjoying them, unlike non-excludable goods where enjoyment cannot be restricted.

A pure public good is defined as non-rival and non-excludable, benefiting everyone equally without the possibility of exclusion.

Public goods in health include controlling contagious diseases like COVID-19, which benefits everyone and cannot exclude anyone from its benefits.

Environmental health threats and regulations on dangerous consumer products are also considered public goods due to their widespread impact.

Safe roads and healthcare institutions that improve the safety of medications and providers are forms of public goods in the health sector.

Protecting vulnerable populations from health conditions is a special form of public good that benefits society as a whole.

Private goods are rival and excludable, such as a personal haircut or a cheeseburger, where consumption is exclusive to the payer.

Club goods are non-rival but excludable, like cable TV networks where access requires payment, but everyone can enjoy the same content.

Common pool resources are rival but non-excludable, such as a trout stream where fish are limited but access cannot be restricted.

Governments often create excludability to solve public goods problems, such as forming armies for national defense.

From a global perspective, national defense is a club good, where citizens pay and receive the benefit of protection.

There are global public goods, such as the eradication of COVID-19, which would benefit everyone on the planet without exclusion.

Local public goods, like clean water and healthcare institutions, can also be addressed through club models to ensure access and quality.

The transcript includes additional notes on altruistic glow as a local or global public good, inviting further exploration of these concepts.

The next section will cover solutions to public goods problems, which are essential for improving global living standards.

Transcripts

hello this is David bishai and I'm here

to present our segment on the role of

government and health this is part two

to cover public goods and Merit Goods

part of the reasons governments uh get

involved in health is to solve problems

in this area of public goods and Merit

Goods

so let's Define merit Goods Merit goods

are under consumed by individuals yet

judged to be desirable by someone else

often a government or your mother

or your teacher decides that you should

have more of this the examples are

education and vaccinations and exercise

the rationale might be that there's an

externality like contagion or the need

of the government to create a an army

they need people to be healthy and so

they will say to the citizens you should

have more of these things like education

or

vaccinations

so the rationale is paternalistic

altruism the idea that person a

wants person B to be happy that's just

altruism and if you're altruistic like

that you just give person B cash and say

to person B spend it on whatever you

want

paternalistic altruism is when person a

wants person B to be happy in the exact

manner defined by person a and so we

don't give person B cash we give person

b a good like the Merit good the food or

the vaccine or medical assistance so

paternalistic altruism is I want you to

be happy in this prescribed way

let's talk about a few more definitions

while we're at it we've got Merit Goods

a good that someone else wants you to

have more of

or rival good is a good that can only be

consumed by one person at a time like a

cookie only one person can eat the

cookie although many people can look at

it one person can eat a cookie that

makes it a rival good

there aren't non-rival Goods where

consumption by person a does not affect

the consumption by person B

that might be the ability to look at the

Moon everybody can look at the Moon

tonight as long as it's night and my

looking at it doesn't interfere with

your ability to look at it

there aren't excludable Goods goods for

which it is possible to exclude people

and keep them from enjoying it people

who didn't pay for the service or the

good can be excluded if we enforce

private property rights non-members can

be excluded non-citizens can be excluded

so excludable Goods uh have the ability

to stop people from enjoying them but

there are non-excludable Goods where

it's not possible to stop people from

enjoying them and looking at the moon is

one of those it's not possible to to

fully stop people from from looking at

the moon

so we can combine these and say that a

pure public good can finally be defined

as a good that is non-rival and

non-excludable that everybody can enjoy

it and you can't stop anybody from

enjoying that makes something a public

good

so here are some leading examples of

public goods in health uh controlling a

contagious disease like covid-19 is

definitely a public good uh that if we

make the covid-19 infection rate go down

everybody who gets to enjoy that

and it's not possible to to say to some

person you're not going to get to enjoy

the control of this contagious disease

controlling environmental health threats

are similar making the air cleaner

making the water cleaner making the

number of rats in the city go away

remember mosquitoes these are things

that are non-rival non-excludable

regulating dangerous consumer products

if something is of poor quality and

dangerous creating institutions that

improve the safety of of products is

something that is a public good and that

same thread safe roads are like that if

we make the roads safer for everybody

it's hard to exclude people from that

you could imagine a toll system but it's

not possible to put a toll on every

single Road

so for us in healthcare

the quality of the health services in a

country is a very special form of a

public good if we create institutions

that make medications safe that make

hospitals safe that make Health Care

Providers safe

in general because these institutions

work in general that is a a public good

if we create safe pills for one person

that's not a public good so if we create

a general institution that improves

Health Quality Healthcare quality that's

a public good and if in general we

protect all of the vulnerable people

from health conditions in our economy

that's also a public good a very special

public good for us in in health

so let's go back to a taxonomy so we

don't forget how to find the public

goods uh the

rival versus non-rival excludable versus

non-excludable so up in the top left

corner we have private Goods they're

rival and they're excludable a

cheeseburger uh is something that is

in the space of private Goods a haircut

if I get a haircut you can't have my

hair cut a personal trainer trains me

and while they're personally training me

they can't train anybody else and I

personal trainer can exclude other

people who didn't pay for their services

a club good

is non-rival but excludable so if I uh

build up a cable TV network

and start beaming uh products over my

cable TV network everybody gets to

watch HBO shows or CNN on the network

but the the Comcast cable company can

exclude non-payers and say you don't get

access unless you pay me and the same

with an HMO if I have a network of

doctors and hospitals in my HMO

I can exclude people who don't pay for

my club and keep them out

uh so I could I could make the HMO

quality excludable but everybody in the

HMO

non-rival list Liberty will enjoy that

uh that good

uh there are non-excludable rival Goods

a trout stream is the best example of a

common pool resource where I take a

trout out of the stream and you can't

have it but unless there's a way to put

a fence all the way around the trout

stream uh then uh it's not excludable

and finally we've already talked about

this last example of non-rival

non-excludable and that's the the pure

public good

so the thing that helps us solve these

problems is to focus on excludability

and often uh the nation or the

government has been the the unit uh that

creates an excludability clause and we

say we have formed a government of our

land and everybody here will enjoy the

public goods of our country we will

provide the most common public good

provided as countries set up is National

Defense

we will

put up an army uh for the public good

for the defense of the people in our

country historically that was super

important because you know 10 000 years

ago that was the big problem that people

would come in from the mountains and

take all your stuff and you need an army

to stop that

so from a Global Perspective National

Defense is is a club good the countries

are clubs they've set up excludability

Clauses and says our citizens are paying

for this Army and we get the army

are there Goods that are public for the

entire planet and the answer is

yeah there are and non-excludability

applying to everybody on the whole

planet that would work for covid-19

eradication that would be a public good

everybody on the planet would benefit

from that achievement and everybody on

the planet would wouldn't be excluded

but there are many many local public

goods that a club could help us with

clean water an altruistic glow from a

poor person getting Health Care

institutions that improve the quality of

care and lowering prevalence of

contagious disease

when you download the PowerPoint version

of these slides just a note to take a

look underneath the notes part of this

slide because I have some extra notes

material about whether altruistic glow

is a local or a global public good so

take a look at that if you have extra

curiosity I thought you might enjoy a

few notes on local versus global

altruistic glow so in our next section

we'll be covering uh how to solve

public goods problems because they they

are in scarcity and short supply

everywhere on Earth and we do need to

solve public goods problems in order to

have a better life