A related characteristic of goods is consumption rivalry, which is whether or not consumption of a particular good by one person prevents simultaneous consumption by another. These two characteristics give rise to four types of goods -- private (rival consumption and nonpayers can be excluded), public (nonrival consumption and nonpayers cannot be excluded), common-property (rival consumption and nonpayers cannot be excluded), and near-public (nonrival consumption and nonpayers can be excluded).

Nonpayer excludability determines whether or not goods can be exchanged through markets. If nonpayers can be excluded from consumption, then markets can be effectively used to exchange goods. If nonpayers cannot be excluded from consumption, then markets cannot be effectively used to exchange goods.

Exclude or Not

• Excludable: If goods have well-defined property rights, then nonpayers can be excluded from consuming a good. A candy bar provides an example of a good in which nonpayers can be easily excluded from consumption. If Roland Nottingham owns a candy bar, then he can prevent Victor Thurgood from eating, consuming, or enjoying this candy bar, if Roland does not offer payment.


• Nonexcludable: If goods do not have well-defined property rights, then nonpayers cannot be excluded from consuming a good. A spectacular fireworks display provides an example of a good in which nonpayers cannot be easily excluded from consumption. Whether of not Roland Nottingham makes payment, he can watch this dazzling fireworks display lighting up the Shady Valley night sky from his front porch. The display is available for all Shady Valley residents to see, those who pay and those who don't.

Consumption Rivalry

Four Goods

Let's take a look at each one.

• Private: Private goods are characterized by rival consumption and the ability to exclude nonpayers. Such goods have well-defined property rights that can be transferred to others, but only if others pay to acquire ownership.


• Public: Public goods are characterized by nonrival consumption and the inability to exclude nonpayers. These goods are, in essence, owned by everyone, which is actually okay because everyone can benefit from simultaneously consuming the goods.


• Common-Property: Common-property goods are characterized by rival consumption and the inability to exclude nonpayers. These goods are owned by everyone, meaning they are not owned by anyone in particular. Even though consumption by one imposes an opportunity cost on others, one person cannot prevent another from consumption.


• Near-Public: Near-public goods are characterized by nonrival consumption and the ability to exclude nonpayers. While nonpayers can be excluded from consumption, nonrival consumption means there is no efficiency reason to exclude nonpayers.

Market Exchanges