The Lighthouse in Economics is an academic paper written by British economist Ronald H. Coase. This paper challenges the traditional view that lighthouses are examples of public goods by showing that privately owned lighthouses existed in England. Coase aligned lighthouses more with club goods because they are excludable by way of charging port fees.

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  • The Lighthouse in Economics is an academic paper written by British economist Ronald H. Coase. This paper challenges the traditional view that lighthouses are examples of public goods by showing that privately owned lighthouses existed in England. Coase aligned lighthouses more with club goods because they are excludable by way of charging port fees. Stopping short of a full analysis, the paper is generally viewed as an excellent insight into the dimensions of public goods and an invitation by Coase for a full economic analysis of the lighthouse. Recently, the paper has been criticized by Van Zandt (1993) and Bertrand (2006) for not fully appreciating the characteristic of non-excludability of public goods. Historical records showed that those lighthouses which ran on voluntary payment did not survive long, and had to be eventually granted the right to collect a light due by the government. Although other light houses were ran privately, the right to collect a non-negotiable light due was supported by a patent from the crown. In other words, they were not privately provided via the free market as understood by the earlier writers. Eventually all these rights were withdrawn or bought up by the authorities because the total light dues that has to be paid by ships was too high as a result of rent-seeking activities of these so-called private providers of lighthouses.
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  • The Lighthouse in Economics is an academic paper written by British economist Ronald H. Coase. This paper challenges the traditional view that lighthouses are examples of public goods by showing that privately owned lighthouses existed in England. Coase aligned lighthouses more with club goods because they are excludable by way of charging port fees.
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  • The Lighthouse in Economics
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