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Fireworks Cookies and Public Goods

Happy 4th of July!

Happy 4th of July!

There are all kinds of goods. Things you buy and only you eat. Things you buy and you share. Things you buy and consuming it doesn’t affect others. And things you don’t have to pay for but you and your friends get to enjoy.

Today we’re talking about fireworks. First off. Who doesn’t like fireworks? They are fun, pretty, and seem to get better every year. In economic verbiage, we get “utility” from watching them.

Have you ever paid money to watch fireworks? No, I’m not talking about paying to go to a theme park or a carnival and then watching a fireworks show there. I’m saying have you ever paid to just watch fireworks. Why not? Well… I guess the question really should be… why would you pay to watch fireworks? Let’s say there was a town that was putting on a fireworks show. They wanted to charge for everyone that goes to the park to watch the fireworks. Well, what would you do? You’d probably go just outside the park and watch the fireworks. They can’t prevent you from looking at the sky. In fact, you can imagine that everyone would hang out right outside the paying area just to watch the fireworks.