Coin-operated fountains as a public good

I'm in Whanganui this week on a writing retreat. This afternoon, we went for a walk around Rotokawau Virginia Lake. When we arrived, we noticed a pretty sad looking fountain in the front of the lake, called the Higginbottom Fountain. However, after walking around the lake and on our way back to the car, I noticed a sign that made it clear that the fountain was coin operated ($1 for 10 minutes, and $2 for twenty minutes). One $2 coin later:

That got me thinking about paying for public goods, which are goods that are non-rival (one person consuming the good doesn't reduce the amount of the good or service available for everyone else) and non-excludable (if it is available for anyone, then it is available for everyone). Fountains like the Higginbottom Fountain are a good example of a public good. One person admiring the fountain or taking a picture of it doesn't stop anyone else from doing the same (non-rival), and if the fountain is viewable by anyone, it is viewable by everyone (non-excludable).

The problem with public goods is that private willingness-to-pay for the public good is often not enough to ensure that the public good is provided to the socially efficient quantity (on a related point, see here). So, if no one is willing to pay the full cost of operating the fountain by themselves, then no one will pay and no one will benefit from it, even if everyone in total would be willing to pay the cost. The problem is that many people will elect to be free riders - receiving benefit from the public good, even though they aren't paying anything towards it. In this case, until we arrived no one was willing to pay the $2 cost by themselves, but everyone ends up benefiting after we paid the cost ourselves (and if we hadn't, the fountain would not have operated).

In discussing in my ECONS102 class the problem of paying for public goods when there are free riders, I often use street lights as an example. I then make the joke that street lights you could make street lights excludable (and limit the free rider problem) if they were coin-operated - pedestrians put a coin in the base of each light, in order to make the next one light up. Well, it appears that the joke is on me. You can sometimes fund public goods that way.