Fire Services – A Public Good?

15 04 2011

Watch the video and read the article on the Tennessee house fire.

In the comments to this post answer the following questions:

  1. Do fire services meet the criteria for a public good?
  2. Is there a free rider problem in this situation?
  3. Is there a problem with incentives in this situation?
  4. How should fire services be provided and funded?
  5. Should the fire fighters have put out the fire?

Due by the start of class on Monday.



17 responses

16 04 2011

1. The fire services does not meet the criteria for a public good, because the definition of a public good is that it is nonexcludable and nonrival in consumption, and in this case it is excluded to people who did not pay the annual $75.

2. No, there is no free rider problem in this situation, because even though Mr. Cranick did not pay the annual $75 to the fire department, he agreed to pay as much as needed to save his properties.

3. Yes, there is a big problem with the incentives in this situation, because by allowing the fire to burn Mr. Cranick’s house down as a punishment for his ignorance of the annual $75 fee, it did not only lowered the Cranick family’s opinion on the city’s fire department, but it also angered everyone in the surrounding area. This negative incentive clearly is not taking its original effect, which is to urge people to have respect for the services provided by the fire department and pay the $75.
4. The fire services should be provided to everyone in the city, including people who did not pay the $75 dollar. However, for the people who did not pay the $75 dollars annually, there should be a heavy fine put on them after they received the service, instead of watching their house to burn down. The fire services should be funded by the government, because it should be a public service that is available to everyone in the city.

5. The fire fighters really should have put out the fire, because by saving Mr. Cranick’s house, they will not only be regarded highly by the people in the city, but they will also have an excuse to charge a heavy fine on Cranick’s family to both prevent the ignorance of the $75 fee from the citizens in the future and also a reasonable amount of money to fund the fire department.

17 04 2011

1.Yes fire services is a public service in this case. People that live inside the city juts pay these $75 in a different way, through taxes, but the people outside the city do not contribute towards the city funds so its understandable why the fire fighters chose not to put out the fire. Fire services are non-rival and non-excludable meaning it is a public service.

2.Yes there is a free-rider problem. Like I mentioned in the first question, people outside the city do not contribute to the city through taxes but expect the same services that people that do pay receive.

3.Yes because with the city trying to put a negative incentive to Mr. Cranick, they actually received a negative incentive too. The city’s reputation in the eyes of all around was lowered by a significant amount, the fire department probably feels terrible and will be treated terrible, and a fire department worker got assaulted. Mr. Cranick’s house was burned to the ground, just because the city was trying to send a message.

4. Fire services should be provided equally to everyone because it is an essential service for our modern community. But the funding is a tricky part. This $75 fee that this city had is actually the best way to get those outside the city to contribute towards the funding for the fire services. Because the people inside the city pay taxes and thus cover the $75 (and probable a LOT more than that) by paying these taxes, they receive the fire services for “free”.

5. I think the fire department should have taken out the fire for sure. Yes, we do understand they were trying to send a message to Mr. Cranick and his neighbors but the message seems too harsh. By making Mr. Cranick learn the hard way, it makes things just so much worse for everyone. I am pretty sure if they took out the fire, Mr. Cranick would have never missed another payment again.

17 04 2011
Linda Lei

1. Fire service doesn’t meet the critieria of public goods. According to definition of public goods, which are nonexcludable and nonrival in comsumption but the family of Gene Cranick had not paid the annual subscription fee to the City of South Fulton, as a result, the firefighters didn’t responsd to the emergency call came from Cranick family.
2. Yes, there is a free-rider problem. The family of Gene Cranick didn’t pay the annual subscription fee this year but they still expected the service.
3. Yes, there is a problem with incentive in this situation. The reputation of The City of South Fulton is affected by the so-called $75 fee, in another word, this is a negative incentive in this situation. Neighbours were furious and disappointed at people who made the policy. Some even took into action by assaulting the chief of fire department.
4. FIre service should be nonexcludable to every one because it’s the basic protection that government can offer. Speaking of funding fire service, residents should pay taxes annualythat include the $75 fee. Even though some people don’t want to pay the fee, they still get the help first and then the fire department will charge them any cost they owe.
5. The firefighters should put out the fire because this is their duty to help residents. They are not supposed to care about why pay the fee and who doesn’t pay, other officers can take care of it. These firefighters’ only job is to put out fire.

17 04 2011
Oleksandr Yesikov

1. In this case fire services do not meet the criteria for a public good, mainly because this good is excludable. The supplier( municipal government) can prevent the people who do not pay for the service from consuming it. As we saw in the video since the family didn’t pay for the service they were excluded from it.
2. No there is no free rider problem in this situation, because even when the house was burning down the fire fighter still didn’t put out the flames just because the family didn’t pay for those services.
3. I don’t think there is an incentive problem in this situation because negative incentive is the best way for the municipal government to urge people into paying their $75 fee. The people that want to receive fire services will play the fee mainly because in a case of a fire they want that fire to be extinguished making it a negative incentive but an effective one.
4. Fire services should be provided and funded by the federal government. Everybody should have access to fire services regardless of whether they payed some sort of fee or not. The federal government should fund all the fire services for this situation not to happen again, and municipal governments should not be forced to collect a fee just because they are being under funded.
5. The fire fighters should have put out the fire and then charged the family a big fine instead of letting the house burn down. The family would most likely be so thankful after that they would pay all their future fees on time.

17 04 2011

1. Fire services in the state of Tennessee don’t fully meet the needs of a public good because of it’s case of being non-excludable in the society. In order to be privileged in having fire protection each person has to pay the 75 dollar annual fee. However, it is considered to be non-rival as those who have paid the fee gets support without affecting other people’s use of the good.

2. Yes, there is a free rider problem because those who try to avoid paying the fee gets dealt with… severely.

3. There’s a big dilemma in that the negative incentive has overcome a moral incentive. The firefighters wanted to teach a lesson of what happens when you don’t abide by the policy and pay the annual fee. On the other hand, the moral incentive would be to help the man in need as he’s in risk of death.

4. Everyone should have the right to live safely and fire services should be provided equally to everyone. I think it’s best if the government provides the funding for firefighter’s who are operating in the rural areas of the city. That way people can live safely and don’t have to worry about forgetting to pay their fee.

5. Yes, they should have done the right thing and put out the fire regardless of the fee. Firefighter’s are meant to be heroes that save lives. I mean, what’s the point of having firefighter’s if they don’t do their job effectively?

17 04 2011
Chris Lee

1. The fire services we know of are likely considered a public good. Multiple people can enjoy it at the same time, and the government won’t prevent the fire department from saving a burning house. In this scenario, fire services have been moderated by placing a fee. Because of this, it is no longer a public good.

2. There is not a free-rider opportunity in this scenario as you can see in the video. Those who did not pay simply did not receive the services.

3. There is no problem with incentives. Plain and simply, if you do not pay, you do not get. Because of this negative incentive, many people should feel inclined to pay.

4. Fire services should be funded if the society can afford it. In many cases it is not because smaller areas do not have the funds to afford to publicly subsidize these services. I think that it’s very important that they do, but if a city or a county cannot afford it, then there is nothing that they can do.

5. The firefighters should not have put out the fire. They were reinforcing the principle of paying the fee. Even though drastic measures were taken, now nobody will be hesitant to pay the fee. It’s not like the family was ignorant to the consequences. The opportunity cost of being protect from fires was simply not equivalent to $75 and they suffered because of it.

17 04 2011
Dylan Huber

1. In this scenario, the usage of the fire services is not a public good since it is excludable. It excludes since if one does not pay the 75 dollars, they are excluded from the service.

2. there is no free rider program since the man who did not pay for the fire insurance did not receive any benefit when his neighbor’s land started to get put while his property was just watched.

3. yes since it disproportionally affects the populous. This negative incentive hurts the people in a large economic way for a simple 75 dollars. Houses are worth far more then that. While this intimidation factor would be great for private practices, for public services it should not be used.

4. the service should be payed for by the citizens in the area through a tax. It should not be an opt-in tax but a blanket tax. Everyone in the area should have to pay for it.

5. on business level, I think the firefighters should not have put out the fire. On a personal level i think they should have put out the fire and it was their responsibility to do so.

17 04 2011
Carolyne Wang

1. In this case, fire services do not meet the criteria for a public good because they are excludable; families living in Obion County who did not pay their $75 fee do not receive fire services.
2. There is a problem with free riders in this situation in that the fire department fears the possibility of free riders. The fire department feels that if they provide residents with fire services even if they do not pay the fee, the residents will take the fee less seriously and more people become free riders thinking that they will receive fire services even if they do not pay for them. The potential for free riders in the system caused the fire department to respond so cruelly to the Cranicks’ situation, because the fire department was trying to deter people from not paying the fee.
3. There is a problem with incentives in this situation. For the fire department, the negative economic incentive of putting out the fire (costly and may lead to a problem with free riders in the future) is much greater than the positive moral and social incentives (putting out the fire is the right thing to do and society will react positively to this action). Because the fire department is in such great need of money, their purpose, which is to help those in need, has been set aside in this situation due to concerns about the lack of funding.
4. Fire services should be a public service; they should be nonexcludable and nonrival under normal circumstances. Fire services should be funded through taxes that residents pay, and not through an optional fee, as people may forget to pay the fee and jeopardize their safety and assets. Even in rural areas, where not all families require the same government services, the most basic and essential government services should be paid for in taxes so that people’s most basic needs are protected.
5. The fire fighters should have put out the fire, because from a moral perspective, it was the right thing to do. It is understandable that the fire department was trying to deter free riders in the future by not putting out the fire, but even if the Cranicks did not pay their fee, the fire department can always charge them a much higher fine after the incident for forgetting to pay the fee and still using the service, and this penalty would be enough of a deterrent for potential free riders.

17 04 2011
Mike Seo

1. The fire service we get can be considered as a public good, because it is non-excludable and everyone benefits from it, even those that do not pay taxes (such as myself). The fire department in Toronto will put out fire even if my house gets burnt down. However, in the video, the fire department only put out fire for those who paid the $75 fee, thus is not a public good anymore.

2. This situation cannot be considered as a free-rider opportunity, because those who did not pay did not get the benefit.

3. Yes, there is a problem with the incentive because both lost in this situation. The city has gained a very bad reputation, and the Cranick family lost their house. If they put out the fire, as I have mentioned below, the city will have gained a huge profit, and the Cranick family would have kept their house.

4. Fire service should be provided to everyone. To those who did not pay $75, when the house catches on fire, they should pay a heavy fine to compensate for their actions (Something around $1000-5000.) This method will (almost) force people to pay $75 annually. For people who do not pay $75: it’s their loss, because I think paying $1000-5000 fine is not worth taking a risk.

5. As I have mentioned above, they should have put out the fire, but should have charged the man a heavy fine for putting out the fire. Not only will the city gain profit worth more than 10-50 people’s share, but it will also have warned the public about the price to pay for not paying the annual fee.

17 04 2011
Chris Li

1. The fire service here cannot be considered a public good. A fee is necessary in order for the people to receive the service. Thus, it is excludable. This does not satisfy the condition that it has to be non-excludable to be a public good.

2. There is no free rider problem in this situation. It was clearly evident in the video that if one didn’t pay for the fire service, they will not receive it.

3. There is an incentive problem in this situation. The incentive for the firefighters to not put out the fire, which was to follow regulation, overrode the incentive to help the citizens. Both parties suffered in the end because of these incentives.

4. The fire service should be freely available to anyone. Thus, I believe that including these fees in the taxes would be the best approach. This way, the people are forced to contribute to the fire service and the service will become a public good.

5. I don’t think the firefighters should have put out the fire. The household decided to gamble their house in that it will not catch on fire and lost. They are the ones at fault for taking that gamble, and it is their own fault for losing the house. The firefighters are simply following regulation and enforcing their law.

17 04 2011

1. Normally, fire service would be seen as a public good since it is equal to everyone. In this case however fire service is not seen as a public good because people who have not paid the $75 service charge are not given service.
2. In this situation there is technically a free rider problem because people who did not pay the fee expected to be helped. Although, the fire department did not help the home owner regardless, therefore dealing with this issue.
3. Yes, there is definitely a problem with negative incentives in this situation. The negative incentive was to let the Cranicks’ house burn down, but by doing this they did not only anger the family, but anger the entire neighbourhood. This resulted in a lower amount of trust in the fire department.
4. In terms of funding, I believe that the $75 fee is a reasonable idea as long as it is handled correctly. I believe that if a family does not pay the $75 they should be helped in the case of an emergency and fined a larger amount afterwards.
5. I understand that the firefighters were doing their job, but I believe that any reasonably caring human being would of put out that fire because it is the right thing to do.

18 04 2011

1) In our society (Canada that is) and the US, government has the interest of saving people if there is a fire. As a result of the protection, it is a public good that anyone has access to. In Toronto for instance, all are eligible for fire services. In the case of the Tennessee fire, it lost the status of a public good when it became excludable due to the fact that they had to pay for it.

2) There is no free-riding problem. They did not have a previous fire that the fire fighters combated without pay. As displayed in this scenario, those who didn’t pay did not get the service.

3) There is a problem with incentives when this service which is supposed to be for everyone is not being paid by everyone. More incentive is needed to get people to pay for fire services because the risk of their house/property catching on fire has not been enough to cause them to pay for it. In the perspective of fire fighters, the message they wanted to send out trumped the moral incentive of saving the house. On a whole, this system has a problem because firefighters should not be judging if they should save the house, and all people should have an equal payment in that protection.

4) If anything, fire services should be provided from mandatory funding from everybody. Protection from harm is the most basic of services and fire protection is no exception. It should be a public service because all should have the right to fire services. A tax system would be the best way forward to paying for this service. This would avoid the situation of the burning house.

5) One can recall the comparison drawn in class of a car crash being the same situation as the fire. You don’t apply for insurance after the accident. You have to pay for damages. But I have to go against this comparison. They are two very different creatures. The fact is, the house burning, is that it was still in the process of being burnt. A crash/accident is instant and can’t be intervened by insurance in the process of the accident. That why it’s not comparable, there is nothing you can do after the accident has occurred. What is done is done. However with that in mind, the firefighters were very capable of stopping it. The reason being that the moment they take the course of inaction, they are basically being as harmful as the fire. On a personal level, they should have put out the fire because they were perfectly able to. In the end, it may have caused others to start paying up their fees but it leaves one family in shambles. If anything, a large fine should have been given instead of the damaging inaction the Tennessee firefighters took.

18 04 2011
Peter S

1) First of all, the fire service is always considered as a public good. However, in this case it does not meet the criteria for a public good, because it is not excludable.
2) There is no free rider problem in this situation because this family did not get any services. Furthermore they did not pay annual fee and as a result he dd not benefit.
3) There is a problem of incentives in this situation. Both sides actually suffered: the city and local government services( police and fire department) got a lot of criticism from the society and this man lost his entire house.
4) Fire service is a government service; therefore it should be provided for free. Actually it is paid by all citizens through taxes. That is the best way of financing this type of service
5) No one was in the house at that moment. It means that no one’s life was in danger. According to the rule they should not have to put out the fire, because it may have affected their career. However from the moral side of humanity they should have helped this man and at least do something in order to save small part of this house.

18 04 2011

1. In this case No, the fire services does not meet the criteria of a public good because it is excludable. People need to pay the 75dollar fee in order to recieve the fire truck services.

2. No there is no free rider problem because the man who did not pay the insurance didnt benefit from anything e.g if his neighbours house was burning he would still not receive any fire truck services.

3. Yes there is a problem with incentives in this situation. Even though people need to pay the 75 dollar fee i think this should rather be a public good because it would have cost the fire men far less by putting out the fire than how much the Cranick family have to pay for their loss now. So this negative incentive doesnt help the public at all because people’s houses are worth more than the 75 dollar fee.

4. I think fire services should be provided by the government for free as it can be considered a need. It should be a public good. People’s lives are more important and the government should do anything to save those lives. If that doesnt work, the fire services can be funded through taxes that people pay instead of paying a separate fee.

5. Yes, the fire fighters should definitely have put out the fire. What they did was something very harsh. They didnt care about the property, they didnt care about people’s belongings, and moreover who knows if they cared about people’s lives? It is understandable that everyone has to pay the fee but in that case they could have made an exception and then fined the family for not paying the fee. This way the family would have learned a lesson and they would never again forget to pay the fee.

18 04 2011
Steven Iarusci

1) In terms of the situation in the article, no, because if you don’t pay, you don’t get the service the fire department offers. Normally, it would meet the public good criteria because you would pay taxes to the government, which would help to pay for services like those of the fire department and police, so you automatically get those services and others like them.

2) There would have been if the firemen did put the fire out, as the owners of the house would have been using the product they didn’t pay for, and be freeriding. However, that was not the case, so there were no freeriders in this situation.

3) I believe so, yes, even though I also think there shouldn’t be a problem with them at all. Right now, the incentive to pay the service fee, or you will not be assisted when your property is on fire. Now, for some reason, the Cranicks valued the $75 more than fire protection, maybe they thought it wouldn’t happen to them or whatever, but what remains is, they didn’t take that option. That seems to me like a problem with the incentive.

4) To continue with my thought from the last question, I think the way it is working now is good, except for a slight problem with incentives. The system is working, taxes fund the service for those who pay taxes, those who don’t pay taxes have to pay a fee to help fund the service and get it’s protection. The cost of possibly losing their home isn’t enough for some people to pay the fee, so something must be added to the loss of the home to make people want fire protection over not paying $75. Most people see that, but others think that it’s alright and that a fire won’t burn their house to the ground, it’s just too unlikely to happen to them. These are the people we have to sway.

I say the easiest and most efficient way to do this is put a cost on the fire department putting out a fire when you didn’t pay the fee, say $10,000 (minimum), thinking on generous terms for those who would have to pay it. Mr. Cranick is a prime example of someone who would have paid this fine when his house was on fire. This system saves the person’s home, but still hits them hard enough to sway their decisions on paying the fee, so they won’t end up with an expensive bill if catastrophe ever strikes again.

5) I think though they did act on protocol, and the problems is with the system not saving homes even in the most dire situations, when someone runs up to you asking to pay whatever it would cost for you to save their home, you should at least radio in and say “Hey, let’s be nice people AND make some money,” to which I’m sure dispatch wouldn’t have a problems doing. I mean, sure they didn’t pay their fee, but this can be a wake up call to not only the family to pay their fee, but also for the system to save people’s homes, even if they didn’t pay the fee, but also to push them to pay it next time around. I’ll just say this: One option ends is a ruined home and broken family, the other a home still standing, and a family paying a fine, to leave and forever pay their fire service fee.

18 04 2011
Alexei Goudzenko

1. Yes, the fire services meet the criteria for a public good because they provide the society the well-being of the public in exchange through taxes. Those outside the area or those who do not pay their taxes do not get to enjoy this service.
2. If the fire fighters were to make an exception and put the fire out than there would be a “free-rider problem” in this situation because those who did not pay for the fire services still enjoyed the benefit from the public good. But this did not happen so, no there was no “free-rider problem” in this situation.
3. In my opinion, there is a bit of a problem on the negative side of the incentive. I think it’s too harsh for those who get into the negative side of the incentives by not paying the fee for the public good. Those who do not pay basically risk their own homes of being burnt down just like in the example.
4. I think that this fee should be mandatory if one is to live in Tennesee. The fee must be given to the government once anybody settles here. Those who refuse to pay will be fined an even greater amount.
5. I think the fire fighters should have put out the fire and settle with the issue of the money later.

18 04 2011
Ilia Merkoulovitch

1. Yes. I consider fire service similar to police service. The police are not going to not protect somebody just because they aren’t a citizen or don’t live in the officer’s district. They are funded through tax dollars. However, in this case, they are not a public good, fire services must be paid for like any private good.
2. There could’ve been, but the fire department ensured there wasn’t one. A homeowner who didn’t pay his bill had his home burned to the ground, and the fire department did not react.
3. Not really. The incentives are clear: pay for fire service, receive fire service. If you don’t pay, then you don’t get any. It’s clear what is at stake here and easy to decide if it’s worth it.
4. To avoid situations like these, fire departments should be funded through taxes like in cities. Those who live out of a district can pay a higher property tax which goes into the charge. This way, it would be practically impossible to not pay for fire service without not paying for property tax.
5. Yes, I think that they should have just implemented a serious fine but still put out the fire. This would be much much more reasonable and still set a solid example for others.

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