Club goods, also known as artificially scarce goods, are defined as products that are nonrival, but excludable. Previously, weather forecasts were widely available to everyone, even people who didn’t pay for the information, but private companies have limited the National Weather Service’s ability to provide that information. These private companies still use the data from the NWS, so it doesn’t cost the company to provide service to one more user (nonrival), however, they can withhold that information from people who don’t pay for the premium experience (excludable). Club goods create a deadweight loss to society because the price of the product is greater than the cost of production.
The G Word with Adam Conover – Weather Forecasts as a Club Good
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