Wednesday, March 13, 2013

Economics and Surfing

Ocean waves, valued by surfers are becoming more like a common resource as opposed to a public good.  How?  Let's use the two part definition to see why.

In economics we catagorize the type of good based on whether or not it is rivalrous in consumption (does the consumption of a particular good result in another individual being unable to consume that same good).  So an apple is rivalrous in consumption, where a lighthouse is not.  Second we look at whether or not the owner of the good can exclude individuals from using the good if they do not pay for the good, which in economics is called "free riding".  Thus basic research once made public is non-excludable, while an iPad is excludable.

Ocean waves are typically non-excludable, and when there are few surfers those waves are also non-rivalrous in consumption, and economists would think of them as public goods.  As The Economist reports, winter is a good time for serious surfers, but as surfing has become more popular, those waves are becoming rivalrous in consumption, when they are crowded with surfers.  This makes ocean waves more like a common resource

In an effort to overcome this problem, some place (such as Fiji) have tried to alter the rivalrly in consumption by requiring surfers to book a place to stay on the island of Tavarua in order to take advantage of premium waves such as Cloudbreak. 

No comments: