The following is a guest post from Jeremy Castle. Jeremy is a graduate student in political science at the University of Notre Dame. His research interests include the political behavior of religious Americans and partisan change. Castle can be contacted via email at firstname.lastname@example.org.
A recent news story reported that Tennessee firefighters stood by as a Gene and Paulette Cranick's home burned because they had not paid the $75 fire protection fee that the town requires of those who live outside its limits. The firefighters prevented the fire from spreading to the neighbors' dwelling, but did not attempt to put it out completely. Much has been written about the absurdity of the situation (see the story).
What does social science have to say about this case? Fire protection can come in two forms: public good or toll good. In economic terms, a public good is nonexcludable (meaning owned in common) and nonrival (meaning once you have used it, others can still enjoy it). To prevent the problem of free riding, or people taking advantage of the good without paying, the organizations that provide public goods use a form of coercion to ensure payment. Most people in the United States pay taxes that are used to support local fire departments. Thus, for most people in America, fire protection is a public good.
However, in the case of the Cranick family, fire protection was a toll good. Toll goods are excludable (owned by one or a few) and nonrival. The owners of toll goods can charge a fee for non-owners to use their service. The problem is that some people will not pay the fee, either because they forget or because they choose not to. Would a phone company allow a nonsubscriber to use its service if it was an emergency? Certainly not. It the phone company did allow nonsubscribers to use their service in emergencies, fewer people would pay for their service and the company might become unprofitable or even go bankrupt. The same logic applies to the fire department in question. While not putting out the fire may seem unethical, the fire department was simply responding to the incentives of its business model.
The case of the Cranicks shows what many policy makers and social scientists realize: fire protection is best provided as a public good. By taxing everyone enough to support a fire department, communities can make sure that no one's home will burn while firefighters stand by because of unpaid bills.