Club Goods, Club Decisions and Social Welfare

Abstract

Club goods are a variety of public goods. They are consumed by individuals with homogeneous preferences who are voluntarily associated in clubs. Club members derive mutual benefit from the collective consumption of club goods, which improves their well-being and therefore enhances social welfare to a certain extent. The private initiative underpins the creation of the classic clubs. Later, the state adopted and implemented club decisions in order to increase the efficiency in the supply and collective consumption of certain private and divisible public goods. Examples of state-regulated clubs are maintaining cleanliness in settlements, supply and consumption of utilities, maintaining the national road network with vignettes and tolls, and others that are analyzed in the paper. The development of digital communications has led to the emergence of thousands of online club formations, including a global one. The final conclusion: with private or government initiatives club activities are expanded, and consumers of club goods grow in number, which in turn increases the level of social welfare.