A private good is defined in economics as "an item that yields positive benefits to people" that is excludable, i.e. its owners can exercise private property rights, preventing those who have not paid for it from using the good or consuming its benefits; and rivalrous, i.e. consumption by one necessarily prevents that of another. A private good, as an economic resource is scarce, which can cause competition for it.The market demand curve for a private good is a horizontal summation of individual demand curves.
Unlike public goods, private goods are less likely to have the free rider problem. Assuming a private good is valued positively by everyone, the efficiency of obtaining the good is obstructed by its rivalry, that is simultaneous consumption of a rivalrous good is theoretically impossible; the feasibility of obtaining the good is made difficult by its excludability, that is people have to pay for it to enjoy its benefits.
One of the most common ways of looking at goods in the economy, illustrated in the table below, is by examining the level of competition in obtaining a given good, and the possibility of excluding its consumption; one cannot, for example, prevent another from enjoying a beautiful view, or clean air.
| Excludable | Non-excludable | |
| Rivalrous | Private goods food, clothing, cars, personal electronics |
Common goods (Common-pool resources) fish stocks, timber, coal |
| Non-rivalrous | Club goods cinemas, private parks, satellite television |
Public goods free-to-air television, air, national defense |
Read more about Private Good: Pricing, Example of A Private Good
Famous quotes containing the word private:
“Men’s private self-worlds are rather like our geographical world’s seasons, storm, and sun, deserts, oases, mountains and abysses, the endless-seeming plateaus, darkness and light, and always the sowing and the reaping.”
—Faith Baldwin (1893–1978)