Is Public Housing a Public Good? What is a Public Good?

GovernorReal World Applications Leave a Comment

This post is triggered by this Headline in today’s (10th Feb 2023) Straits Times article:

Public Housing Public Good
Is Public Housing a Public Good? What is a Public Good? 2

It is a very good, very thoughtful article.

But Public Housing is NOT a Public Good.

What is a Public Good? There are 2 main characteristics:

Non-Excludability, which means that once the good is provided, it is impossible or too expensive to prevent anyone from enjoying the good.

Non-Rivalry, which means that one person’s consumption of the good does not reduce the quantity and quality available for others.

In the latest A Level Syllabus, (see H2 Economics Syllabus and H1 Economics Syllabus), Rejectability is considered the 3rd characteristic. It means that no-one can refuse to consume the good.

Obviously, a HDB flat is excludable. You may not even be able to get a flat even if you are willing to pay anything for it! Obviously, it is rivalrous in consumption. Please do not happily enter and plonk yourself into other people’s flats! And even if you did, it is still rivalrous, as you will be competing for space in the flat. Obviously, it is rejectable. For example, you can choose to buy a private apartment or sleep in West Coast Park (Not East Coast please as I am sleeping there). Nobody is going to force you to buy a HDB flat at gun-point!

The real examples of public goods are National Defense, Street Lighting and Flood Control Systems. Open air parks come close to being a public good and they may be considered quasi-public goods.

So please…public housing is not a public good. Neither is the public toilet (who are you in my cubicle?!?), public library, public school, public hospital…you get my point. So why are they called “public”?

It is provided by the public sector and/or for the general public.

So did Chua Mui Hoong commit an error? Well, she is not writing an economics paper in an economics exam. She is a journalist, writing to the lay audience (general public).

Housing is a necessity and may also be considered a merit good (not sure better ask and attend our economics tuition programme!). So what she means is that public housing must serve the interests of the general public.

Hope this helps! Till next time!

About The Economics Tutor

Founded by Kelvin Hong in 1998, The Economics Tutor is one of the leading economics tuition in Singapore. We provide a comprehensive program to guide students in understanding complex economic concepts and applying them through case study analyses, essay writing and discussion of real world events.

For 24 years, the way we teach JC Economics Tuition (A Level Economics Tuition) and IB Economics Tuition classes helped learners appreciate economics and everything it entails on a much larger scale. We take things step-by-step, implement effective techniques in memorising frameworks and give every student the chance to nurture their ideas. 

We don’t just solely focus on helping you get stellar grades and perfect scores. We make sure that we also hone the critical thinking skills and investment / business decisions you can use outside the four walls of your classroom.

Looking for a fun, engaging and probably the best economics tutor in Singapore? Look no further—check out our extensive and high quality economics resources on the website such as our IB and A Level Economics Publications

Book your lesson today and master the nuances of economics in our next class!

Leave a Reply

Your email address will not be published. Required fields are marked *