Non-Rivalrous Goods

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21 Aug, 2024

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Non-rivalrous goods refer to goods that can be consumed by one person without diminishing the consumption possibilities for others. The consumption of a non-rivalrous good by an individual does not impede or reduce its availability for others. In fact, an additional unit of these goods can bring benefits to all users.

Non-rivalrous goods are characterized by their compatibility with shared consumption among people. This trait is particularly evident in public goods, which are goods utilized for the overall benefit of the general public. Public goods often arise as a result of government welfare measures, contributing to the welfare and well-being of society as a whole.

What Are Non-Rivalrous Goods?

Non-rivalrous goods are consumable goods that one person can consume without affecting the consumption of others. Additional units of these goods can benefit all users.
Rival goods, on the other hand, are goods that, when consumed by one person, prevent others from consuming them.
When it comes to non-rival goods, an additional unit will be distributed among all consumers, ensuring that everyone benefits.
While non-rival goods are typically not restricted to the public, there can be exceptions. Some non-rival goods may have restricted access if they fall into the category of being non-rivalrous but excludable.

Non-Rivalrous Goods Explained

Non-rivalrous goods are resources consumed by an individual, and they do not reduce the amount available to other individuals. The opposite of it is addressed as rival goods, which means they are goods that, when consumed by one individual, prevent other individuals from consuming them.

For example, a pen is rival good. When an individual uses a pen, only that person can use it at that time, and another person cannot use the same pen simultaneously. This means one person's use or consumption of that good prevents it from being consumed by others. as opposed to a bus or any other public transport where multiple people can use them simultaneously.

Another distinguishable aspect of non-rival goods is the marginal benefit of providing all consumers with an additional unit of the good. An additional unit of non-rival goods will invariably be distributed among all the consumers. On the other hand, with rival goods such as an apple, if additional units are bought, it is beneficial for the individual who buys it, unlike a street light, a non-rival good where additional light could help light up the community a little brighter.

This means that when an individual needs more rival goods, the good must be increasingly produced. It could also be increased by reducing the quantity available for someone else. Provided there is a real opportunity cost to giving more of those goods to others.

Examples

Let us look into some examples for a better understanding of the concept:

Example #1

Public roads are an example of non-rivalrous goods. It is for public use, and there is no restriction to certain classes of people. Since one person walking through it does not reduce or diminish the pathway for the other person to use, this category includes public roads.

Example #2

Knowledge is non-rivalrous. It is a tradable thing. One person's knowledge does not affect another person's knowledge. Knowledge sharing (or consumption) does not diminish that person's knowledge. Similarly, if something has been discovered, one individual's use of that knowledge does not prevent others from applying the same knowledge. According to copyright law, it is a public good (even in its unbalanced form). The law only privatizes the expression of ideas, which are public and not restricted.

Non-Rivalrous Goods vs Rivalrous Goods

The key differences between both types are as follows:

Key points	Non-Rivalrous Goods	Rivalrous Goods
Concept	Non-rivalrous consumption of goods does not affect the quantity or quality of goods available to the next individual.	Rival goods are not available for consumption by others when an individual consumes them.
Competition	Non-rival goods provide open access to all and do not face fierce competition for being consumed.	Rival goods restrict the consumption of goods if one person consumes them; hence, there will be fierce competition.
Examples	Non-rival examples include radio, parks, etc.	Examples of rival goods include mobile phones, cars, other vehicles, etc.

Non-Rivalrous And Non-Excludable Goods

Both these concepts are different from one another and yet similar in various aspects, and the differences are below:

Key points	Non-Rivalrous Goods	Non-Excludable goods
Concept	The goods do not affect other people's consumption if consumed by another.	A non-excludable good refers to those goods in which restrictions on people cannot be placed for enjoying the benefits of the goods.
Quantity and quality of goods	These do not diminish the quantity or quality of the goods consumed.	Non-excludable goods are similar to non-rival goods and do not diminish the quality or quantity of consumed goods.
Number of users	One person's benefits from using the product do not depend on the number of users.	Non-excludable goods benefits also do not depend on the number of users.
Key differentiation	Goods not rival in nature cannot be restricted to the public, as one person's usage does not affect the other. However, there are exemptions. They can have restricted access, provided they fall under the non-rivalrous but excludable category. For example, in cinema halls, the public can use them freely, but if the hall's capacity is full, people naturally have to be restricted from using them. Other examples include club goods, toll roads, etc.	Here, pure public goods, which cannot be excluded under any circumstances, are included, such as a country's national defense. Regardless of whether the population grows or shrinks, a country's protection is provided to every citizen of the nation. Other examples include air, knowledge, etc.

Frequently Asked Questions (FAQs)

1. How do governments pay for non-excludable and non-rivalrous goods?

The government funds welfare activities primarily through taxation. When taxes are from the general public, that money is used to build schools to provide education, hospitals to provide health care services, roads to be paved, etc. Education, healthcare, and transportation are all products of tax money.

2. What are goods that are non-rivalrous and excludable called?

Some goods are excludable non-rivalrous goods. They are open to everyone's access and sometimes require a special fee to get access, such as toll gates and cinemas. Excludable non-rivalrous goods differ from non-excludable and non-rivalrous goods, as the latter cannot be restricted under many circumstances.

3. Is clothing rivalrous or non-rivalrous?

Clothing generally comes under the category of rivalrous good. When one person wears or uses a specific piece of clothing, it becomes unavailable for simultaneous use by others. For example, if someone is wearing a shirt, another person cannot wear the same shirt at the same time. This characteristic of clothing makes it rivalrous in nature.