Essay about Exploring Club Goods and Membership Fees

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INTRODUCTION: Public goods are goods that are neither excludable, nor rival in consumption. Excludability refers to the extent to which the good consumed is limited to certain groups of consumer, and rival refers to the extent the consumption of a particular good limits the consumption of others who wants to consume that particular good. However, some goods have both characteristics, these goods are called pure public goods, while others have either of the characteristics, and are referred to as quasi-public goods; club goods, local public goods, common resources. Also, some goods are characterized as rival and excludable in consumption, these goods are called private goods. The private goods are sometimes used to refer to club …show more content…
Club goods are formed based on the consumer’s taste for association, cost reduction from scale economies, cost reduction from team production, and the sharing of public goods (Sandler and Tschirhart 1980, 1482). With the definition of excludability of club goods, a club good is a good purchased within a club and consumed by all members of the club. However, a club good differs from a private good not just because of its relatively low rivalry in consumption but the limitation of a voluntary association by individuals. The provision of club goods limits the role of government to setting the context for providing solutions that may stem from the provision of club goods like, assuring property rights and enforcing the rules for the negotiation and bargaining for club goods provides (Warner 2011, 156) for club providers. By security property right organization are able to manage public goods by forming clubs (156). Also, club goods free the government from implementation concerns, allowing it to focus on broader issues. Club goods approach to management collection have potential to be innovation, effective than government management and delivery (156). The incentive to form a club is based on the ability of clubs to internalize benefits and shed negative externalities, which is often through exclusion of the

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