In this note we shall look at one of the implications of the hypothesis that Stigler and Becker develop in their paper 'De Gustibus Non Est Disputandum' (American Economic Review, 1977, pp. 76-90). Specifically, we shall look at the implications the hypothesis has for the provision of a special group of public goods, namely addictive public goods. We will show how public provision of addictive goods provides one explanation for the growth of government.
Stigler and Becket assume that all persons' preferences are stable over time, but that income and the utility derived from a specific good changes over time. The utility derived from a good is a function of all inputs that are used in the consumption of the good. Here, we will only be concerned with the following three inputs: human capital, commodities, and time. In particular we will be concerned with goods where the utility derived from the consumption of those goods is positively related to the amount of the good previously consumed. Following Stigler and Becker we will call goods of this type addictive goods. Examples of addictive goods are music appreciation and public libraries. The utility derived from an addictive good depends on the amount of time invested in the consumption of it; the more time spent in the consumption of the good, the more utility will be derived from it, and therefore the more the individual will tend to consume.
When the terminology of Stigler and Becker is used, the marginal utility of an activity increases with the stock of consumption, so that, in a sense, the person gradually becomes addicted to the good. One implication of this is that older people, who will tend to have a larger consumption stock of the good, will demand more of it than younger people.
In the market for private goods each individual adjusts the amount bought