nonmarket

Nonmarket refers to goods, services, and activities that are not allocated primarily through voluntary market transactions. In economics, nonmarket outcomes are those not determined by price signals in competitive markets; allocation is instead governed by nonprice criteria such as government regulation, legal rules, social norms, or organizational decisions.

Common examples include public goods and services that are financed by taxation or government provision (national defense, basic education, public safety), and resources managed through rules rather than prices (fisheries quotas, land use planning). Household production and informal care, as well as nonprofit organizations, often operate in nonmarket spaces where prices do not reflect social costs and benefits.

Nonmarket valuation is the practice of estimating the economic value of nonmarket goods or outcomes. Methods include contingent valuation, choice experiments, travel-cost methods for recreation, and hedonic pricing for environmental attributes. Valuation is debated, with concerns about feasibility, bias, and the meaning of monetary measures for public and ecological goods.

Policy uses of nonmarket instruments include regulations, mandates, subsidies, public provision, and zoning. Nonmarket approaches are often paired with market-based tools to address spillovers and equity concerns, though critics argue they can be less efficient or transparent.

The distinction between market and nonmarket activities helps economists and policymakers assess how resources are allocated and how welfare is affected when prices do not reflect social values.