Samuelson condition

The Samuelson condition, authored by Paul Samuelson , in the theory of public goods in economics, is a condition for the efficient provision of public goods. When satisfied, the Samuelson condition implies that further substituting private goods provision for public goods provision (or vice versa) would result in a decrease of social utility.

For an economy with n consumers the conditions reads as follows:

$sum\_\{i=1\}^n\; MRS\_i\; =\; MRT$

$MRS\_i$ is individual i's marginal rate of substitution and MRT is the economy's marginal rate of transformation between the public good and an arbitrarily chosen private good.

References

2. Brümmerhoff, Dieter (2001), Finanzwissenschaft, München u.a.O.

See also

• Lindahl equilibrium