On the pricing and benefit structure of a private club or public utility

In this paper we have analyzed the pricing and benefit structure of a private club or public utility. By means of a simple two-period model, we have analyzed the relationship of the two-period charges and their responses to a change in the rate of interest. We have also analyzed the pricing schemes under various objectives which include the equal payment, the social gain and the public choice cases. The two-period pricing schemes under the special cases where no intertemporal borrowing or lending is allowed and where memberships are growing at an exogenous rate have also been analyzed. In addition, we have presented a multiperiod model with exogenous growth in memberships and with the consideration of inflation. A schedule of fair access charges for this model has been derived. It should be useful in many practical applications. Copyright Martinus Nijhoff Publishers 1987