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On the pricing and benefit structure of a private club or public utility

Author

Listed:
  • Winston Chang
  • Lawrence Southwick

Abstract

In this paper we have analyzed the pricing and benefit structure of a private club or public utility. By means of a simple two-period model, we have analyzed the relationship of the two-period charges and their responses to a change in the rate of interest. We have also analyzed the pricing schemes under various objectives which include the equal payment, the social gain and the public choice cases. The two-period pricing schemes under the special cases where no intertemporal borrowing or lending is allowed and where memberships are growing at an exogenous rate have also been analyzed. In addition, we have presented a multiperiod model with exogenous growth in memberships and with the consideration of inflation. A schedule of fair access charges for this model has been derived. It should be useful in many practical applications. Copyright Martinus Nijhoff Publishers 1987

Suggested Citation

  • Winston Chang & Lawrence Southwick, 1987. "On the pricing and benefit structure of a private club or public utility," Public Choice, Springer, vol. 55(3), pages 227-244, October.
    • Handle: RePEc:kap:pubcho:v:55:y:1987:i:3:p:227-244
    DOI: 10.1007/BF00124868
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    References listed on IDEAS

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    1. Burckhard von Rabenau & Konrad Stahl, 1974. "Dynamic Aspects of Public Goods: A Further Analysis of the Telephone System," Bell Journal of Economics, The RAND Corporation, vol. 5(2), pages 651-669, Autumn.
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    8. Martin S. Feldstein, 1972. "Equity and Efficiency in Public Sector Pricing: The Optimal Two-Part Tariff," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 86(2), pages 175-187.
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