Private goods are owned by individuals and provide benefits exclusively to the owner. Examples include food, cars, clothing, and personal electronics. The owner has complete control over who can benefit from the product.
Private goods are those goods intended for consumption by the owners of such acquired goods. This is different from a public good, which offers some kind of benefit and utility to a wider range of people. With a private good, the focus is on the benefits the individual obtains after purchasing the product from a supplier or manufacturer. Almost every type of private good is produced as a means of making a profit.
There are usually two characteristics with any type of private good. One has to do with the issue of exclusivity. The owner of that asset is in complete control of who can benefit from the use of the product, or even anyone who receives some sort of benefit. At the same time, a second feature has to do with consuming the product in a way that prevents anyone other than the owner from receiving any kind of direct or indirect benefit from the good.
One of the easiest ways to understand the concept of a private good is to consider two examples of these types of products. When a consumer buys a hamburger, he becomes the owner of that product. At that point, the owner may decide to consume the entire burger himself, an event that effectively bars anyone else from benefiting from the product. The owner may also choose to share a portion of the burger with one person while denying another person access to the product. In both situations, the owner decides who, if anyone, has access to the product and whether anyone other than the owner receives some sort of benefit from the asset.
Along with food, there are other examples of private ownership that actually allow the owner to control access to a good. Cars are a common example, since the owner decides who is and isn’t allowed to drive the vehicle, or even who is allowed to drive in one of the passenger seats. Clothing is also a private good, with the owner exclusively wearing the purchases or having direct control over who else is allowed to borrow any clothing. Items like personal electronics also fall into this category, with owners determining who gets to listen to CD players, use Internet tablets, or borrow laptops. In all of these scenarios, the owner assumes control of the private asset and is free to use it in any way they see fit.
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