Public Goodness Survey

What is the demand for public goods? We don't know...and that's a problem. If taxpayers could choose where their taxes go (logistics), then we would clearly see the demand shape for every public good. How much variation would there be?

It stands to reason that if there wasn't enough demand for a public good...then perhaps it shouldn't be a public good. In order to determine where the public goodness threshold might be...I've created a survey.

This public goodness survey consists of 10 different hypothetical public goods. Each public good has its own chart which shows a different demand shape.

To participate in the survey simply rate each public good from 0 to 10...

0 = no depth/breadth = no public goodness
10 = maximum depth/breadth = maximum public goodness

...and indicate whether or not it should be a public good.

For backstory and analysis...please my blog entry... Visualizing And Evaluating The Public Goodness Threshold.





1. PGA - In this case there's not much depth (people didn't contribute much) but perfect breadth (everybody contributed). Every single citizen contributed the same exact amount of money to this public good. Let's say the amount is $5 dollars. Of course, $5 to the poorest person doesn't mean the same thing as $5 to the richest person. This is the logic behind the progressive tax...

Economics can establish that a man’s marginal utility of money diminishes as his money-income increases. Therefore, they concluded, the marginal utility of a dollar is less to a rich man than to a poor man. Other things being equal, social utility is maximized by a progressive income tax which takes from the rich and gives to the poor. This was the favorite demonstration of the “old welfare economics,” grounded on Benthamite utilitarian ethics, and brought to fruition by Edgeworth and Pigou. - Murray Rothbard, Toward a Reconstruction of Utility and Welfare Economics

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So what does PGA's chart tell us? It tells us that everybody demands this good. But income and demand for this good are inversely correlated. The more money you make, the less accurately this good matches your preferences.





2. PGB - Another straight line. But, it's twice as high on the y-axis. So rather than everybody contributing $5...everybody contributes $10.





3. PGC - Uneven depth but great breadth. Everybody demands this public good...but income and demand for this good are inversely correlated.





4. PGD - Lousy depth but great breadth.





5. PGE - Good depth and great breadth.

Turns out that this forum only allows a maximum of 5 images per thread. So to complete the survey you'll have to see my blog entry... Visualizing And Evaluating The Public Goodness Threshold.

Can you think of other likely demand shapes? Would any public goods match any of these shapes? If anybody would like to create and share their own shapes...just PM me your e-mail address and I'll send you the PowerPoint document.

You may like to see another approach to public goodness survey https://www.researchgate.net/project/Prediction-of-goodness

Xerographica said:

What is the demand for public goods? We don't know...and that's a problem.

Click to expand...

Interesting depiction, but I dont buy it. Far too academic, and thus not to the point. (Sorry to be so harsh, you've done a good piece of work - I simply do not agree regarding its "relevance", as I will try to explain below.)

The trade-off between public and private goods/services* is done naturally in each community/nation by means of public wants/desires. What the people want, the people usually get. Politicians try to imagine what they are in order to get elected. And there is not much economic analysis can do about either predicting or actually knowing what they may be at any given moment. (The "economic speed" of our market-economy has accelerated greatly since the advent of the Internet.)

All economics does, in fact, is tell us what constitutes the volume of Supply&Demand, and where it might be dysfunctional. Because at the heart of the Supply&Demand enigma lies "Labor". It is by our labor that we earn income with which to purchase goods/services. But it is by means of governmental taxation policy that it is determined how much we keep of what we earn according to the amount earned.

It is also by means of our Consumption that we determine "Demand" and thus the character of "Supply".

I will admit that Public Services are an important Economic Component of "well-being". The comparison of Health-Care in America with that of Europe is a telling example. What is the essential difference between the two? Its cost - by means of private insurance, HC costs twice as much per capita in the US as it does in Europe.

For such a key service (truly important to how well we live or do not live) is there any discussion that such a key service to mankind should not be the most important purview of central government? I think not.

And I would say the same of Education. Especially in this Information Age into which we are entering (thus moving out of the Industrial Age).

Meaning what? Two very different conclusions for either the US or Europe:
*The US must get its provision of Health Care and Education under control in order to make its offering far less costly. The costs of both are rampant. Which means far too many of America's young are not getting the educational qualifications that will determine how well a standard-of-living they might achieve.
*But Europe does contain the cost of both! And both are far, far less expensive than the US. So, Europe had best concentrate on the availability of Education to a larger part of its population - because the US graduates a far greater percentage of its people with post-secondary qualifications. (Which, frankly, I think it is trying hard to do - but it's not easy.)

*Services are far more important, btw, in this modern day and age. Eg;, "electricity" is not a good but a service.

I am not sure we understand each other Xerographica is describing public goodness surveys for selection of goods and services, true? My concept is same just in the first part, there are public goodness surveys, but I would like to predict what is the best method for selection of decision-makers and their decision-method (not goods). So, I may be out of topic (depends on what is the essential part of this thread , still I wanted to send a reply because I think that the issues of constitution (decision-makers selection, decision methods) should be solved before we get to goods and services.
Cheers
M.

Xerographica said:

What is the demand for public goods? We don't know...and that's a problem. If taxpayers could choose where their taxes go (logistics), then we would clearly see the demand shape for every public good. How much variation would there be?

It stands to reason that if there wasn't enough demand for a public good...then perhaps it shouldn't be a public good. In order to determine where the public goodness threshold might be...I've created a survey.

This public goodness survey consists of 10 different hypothetical public goods. Each public good has its own chart which shows a different demand shape.

To participate in the survey simply rate each public good from 0 to 10...

0 = no depth/breadth = no public goodness
10 = maximum depth/breadth = maximum public goodness

...and indicate whether or not it should be a public good.

For backstory and analysis...please my blog entry... Visualizing And Evaluating The Public Goodness Threshold.

1. PGA - In this case there's not much depth (people didn't contribute much) but perfect breadth (everybody contributed). Every single citizen contributed the same exact amount of money to this public good. Let's say the amount is $5 dollars. Of course, $5 to the poorest person doesn't mean the same thing as $5 to the richest person. This is the logic behind the progressive tax...


So what does PGA's chart tell us? It tells us that everybody demands this good. But income and demand for this good are inversely correlated. The more money you make, the less accurately this good matches your preferences.

2. PGB - Another straight line. But, it's twice as high on the y-axis. So rather than everybody contributing $5...everybody contributes $10.

3. PGC - Uneven depth but great breadth. Everybody demands this public good...but income and demand for this good are inversely correlated.

4. PGD - Lousy depth but great breadth.

5. PGE - Good depth and great breadth.

Turns out that this forum only allows a maximum of 5 images per thread. So to complete the survey you'll have to see my blog entry... Visualizing And Evaluating The Public Goodness Threshold.

Can you think of other likely demand shapes? Would any public goods match any of these shapes? If anybody would like to create and share their own shapes...just PM me your e-mail address and I'll send you the PowerPoint document.

Click to expand...

It's a suggestion, but I'm fairly certain that it has been proven decades ago by mathematicians that we cannot aggregate individual demand curves to come up with an aggregate curve. The reason? Demand, at the macro level, affects income, and income in turn affects demand, so it is mathematically impossible to do the very thing that so many main-stream economists end up doing. They simply assume that a change in income will not change demand, which is empirically false.

I think the same limitations would apply here as a public good can affect income, and thus, change the demand in the aggregate. One actually has to start at the macro level, and cannot start at the micro level to develop any aggregate curves.

Wisdom said:

It's a suggestion, but I'm fairly certain that it has been proven decades ago by mathematicians that we cannot aggregate individual demand curves to come up with an aggregate curve.

Click to expand...

Netflix can currently aggregate thumbs up. We can imagine a hypothetical comparison of 13 Reasons Why and Sense8...



We can see that 13 Reasons Why is more popular than Sense8. But is it more valuable? Imagine if Netflix subscribers had the option to divide their limited subscription dollars among the nearly unlimited content...



13 Reasons Why received more votes, but Sense8 received more dollars. 13 Reasons Why is more popular, but Sense8 is more valuable. In other words, Sense8 is more beneficial. Knowing the benefit of Sense8 is necessary in order for Netflix to conduct an adequately informed cost/benefit analysis. With Netflix's current system... it canceled the show without actually knowing its benefit.

If subscribers could spend their subscription dollars on their favorite shows/movies, then it would be possible to see the depth and breadth of demand for each and every show/movie. This would allow Netflix to compare the public goodness of all its content.