Research On Pricing Of Resource-based Quasi-Public Goods In China

In the real world, a large number of quasi-public goods do not rigorously have the characteristics of public goods. Compared with pure public goods, the quasi-public goods have huger internal effects and can satisfy individuals' needs. Meanwhile, the benefits the individual receives are divisible, which means quasi-public goods can be supplied through the market mechanism. In order to fulfill the market mechanism of quasi-public goods provision, how to effectively price them has to be resolved first. Due to the important role of public goods in economic development, this subject is significant in terms of not only academics but also practical implication. Since the range of public goods is extremely extensive, for simplicity, this paper will concentrate on tap water industry, one of the resource-based quasi-public goods.This paper summarizes the different pricing practices of tap water, compares different countries' pricing methods, and reviews China's pricing mechanism and its drawbacks. Based on these mentioned above, I think, compared with the traditional pricing methods in China, advanced pricing methods have more advantages, which not only reflects the value of the resource-based quasi-public goods but also contributes to the sustainable development for resources use. By case study, this paper empirically analyzes the pricing of tap water in city A by marginal opportunity cost model. Finally, this paper makes the conclusion and policy implication.