In determining whether and how much of a public good to provide, cost-benefits analysts use the same type of price signals for public goods as are readily available for private goods.

Question

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For public goods, price signals are not readily available as they are for private goods because public goods are non-excludable and non-rivalrous, making it difficult to determine individual willingness to pay through market prices. Cost-benefit analysts often have to use alternative methods, such as surveys or models, to estimate the social value and optimal provision level of public goods.

In Determining Whether and How Much of a Public Good