Resultados de Pauta de Registro de la Entrevista

A market in which people pay for access to – or use of – public goods reveals personal information about valuations of public goods. We shall refer to prices paid for access to public goods as user prices. User prices require low-cost means of exclusion of people who do not pay. In the case of private goods, exclusion is intrinsic in the nature of the good: only people who pay can benefit from private

47 Without the participation of person 2, the benefit from project B is 110 and the benefit from project A is 90; with the participation of person 2, the benefit from project A is again 170 and the benefit from project B is 160.

48 Person 1 gains 40 from person 2’s participation and person 3 loses 60.

49 Without the participation of person 3, the benefit from project A is 150 and the benefit from project B is 80. With person 3’s participation, the benefit from project A is 170 and from project B is 160.

goods because the benefit is personal. Exclusion is impossible from various public goods, such as benefits from the rule of law, competitive markets, and national security or defense. There are also cases in which exclusion is possible but we do not want to exclude, such as the services provided by the police and court system.

Exclusion from schooling and education as well as from health insurance and health care is feasible; therefore, private markets exist for education and health care. Exclusion from roads and highways and from bridges and tunnels is also possible; all transportation systems allow exclusion. Exclusion from museums, art galleries, and zoos – as well as from obtaining drivers’ licenses and passports and other certification – is possible. Hence, user prices can be charged.

A user price is an application of the benefit principle of payment.

The benefit principle of payment is that people who benefit should pay.

The benefit principle applies to personal payments in any market because, in mar-kets, people need to pay in order to benefit. The benefit principle is a normative proposition when stated as:

People who benefit should pay.

The converse of the normative statement of the benefit principle is:

People who do not benefit should not have to pay.

Lindahl prices and user prices

We applied the benefit principle when we considered voluntary payments for public goods, as in the case of the Lindahl solution. People pay for public goods in order to benefit. However, if there is no exclusion, they can also free ride and ben-efit without paying. The Lindahl solution showed how mutual free riding could be efficient: if people voluntarily pay their Lindahl prices based on their true ben-efits from a public good, the consensus quantity of the public good is the efficient quantity.

Once the efficient Lindahl quantity (or standard) of the public good is known, efficient use of the public good requires free access. The free access is Pareto-improving: people with access to use the public good are better off and no one is made worse off. Therefore, to ensure efficient access:

Lindahl prices do not exclude people from access to use of public goods.

If feasible, the personally paid Lindahl prices would, for example, finance the acquisition of art in an art museum or the purchase, feeding, and housing of animals in a zoo – and entry would be free. The Lindahl prices would similarly finance a highway or a bridge and – without congestion – efficient access requires no payment for use. Because of the information problem, Lindahl prices, how-ever, are not feasible – which is why we are led to consider alternative means of financing public goods through user prices.

User prices differ from Lindahl prices.

By paying user prices, people reveal information about personal MB when they voluntarily pay, for example, for education and health care or a toll road, bridge, tunnel, national park, beach, museum, or zoo. If person i voluntarily pays the user price P_i^use, we know that:

MBi ≥ P^use_i . (3.29)

That is, person i’s valuation of use exceeds (or is at least equal to) the user price paid.

People reveal their personal benefit by paying user prices.

The efficient user price is zero: because the MC of use of a pure public good is zero, it follows that the price of access to the public good should be zero. Children looking at an elephant in a zoo should pay a zero price because the MC of looking at the elephant is zero. However, a zero price provides no revenue to pay for the elephant’s food and upkeep.

User prices provide revenue to pay for public goods.

Indirect user prices

User prices can be paid voluntarily and directly. Payment of user prices can also be voluntary but indirect. For example, a tax on gasoline is a tax on use of roads and a tax on automobiles is a tax on the option to use a road. The user prices can be avoided by not using or owning an automobile.

Subsidies and partial user prices

User prices are partial when governments subsidize part of the costs of pub-lic goods. Education is often subsidized from pubpub-lic revenue, with school fees covering only part of the cost of education. Similarly, health care may be subsi-dized, as may be entry to museums and art galleries. Public transportation is often subsidized.

Natural monopoly

User prices for public goods reintroduce natural monopoly and the question of whether the monopoly supplier should be the government or a private supplier.

If supply is profitable, private supply is feasible. Private supply is also feasible if government subsidies cover losses incurred in supply.

Two-part user prices

Administration of a school district and teaching children in classrooms are dis-tinct tasks. Teaching effectiveness declines as the number of children or students

in a classroom increases beyond some size.⁵⁰ School administrators and curricu-lum developers, however, provide services that are a public good for larger num-bers of children – through effectiveness of school organization, selection and monitoring of teachers and instructors, and updating of the curriculum to include new knowledge. User prices that finance schooling are therefore two-part pay-ments. One user price would finance costs of school-district administration; the other would finance costs at the level of the school and classroom, including the salary of the teacher.⁵¹

User prices and fixed costs

When public goods are congested, the purpose of user prices is to limit access so as to avoid congestion. We shall now consider user prices paid when public goods are not congested. The purpose of the user prices is thus not to avoid congestion or crowding but rather to have users (those who benefit) pay for the public good.

We denote by F the fixed cost per unit of time of providing a public good. For example, in the classroom, the fixed costs F include the cost per hour or per day of the teacher or instructor. There are also other fixed costs that are attributable to the class. The cost of the class includes attributed parts of salaries of the school administrators as well as the past costs of education (or investment in human capital) of teachers and instructors and past costs of the physical investment that provided the school campus and buildings. Similarly, in the case of health care, the fixed costs F consist of salaries of medical staff and attributed costs of invest-ment in equipinvest-ment and hospitals; a public-good benefit is also provided through option demand (the public-good benefit is the option to use the facilities, if the need arises).

Payment of user prices spreads past fixed capital costs (or costs of investment) over time. The attribution of fixed costs over time is an exercise in account-ing. We shall not study how accountants compute the attribution of fixed costs over time. Nor shall we study, for example, how accountants attribute parts of the fixed costs of school administrators over classrooms to compute the fixed cost F per semester of a course being taught. Our assignment is not to study accounting.

We therefore now consider a public good for which accountants have informed us of the fixed cost F per month, semester, or year.

With the cost known, what are the consequences of a public policy of seek-ing to finance the fixed cost F through user prices?

50Returning to figure 3.1b, we have, for example, n1= 25. After n2= 50, there may no longer be positive benefit from children spending time in the classroom.

51Two-part user pricing has been studied for admission to an amusement park. To maximize profits, should admission to the amusement park be free with user prices charged for rides of the different types? Or should there be a price of admission, with rides free once the price of admission has been paid?