Blocher (2006, pages 370-371) provides an example: . . . A developer may be faced with the prospect of building a hotel at a cost of $10 million. She expects to receive $9 million in total receipts over the life of the hotel from the hotels customers. Additionally, the hotel is expected to confer $3 million of benefits to non-customers, including the value of spillover business from hotel customers, prestige for the town, enjoyment of the building’s architecture, and so on. Despite the total gross benefit of $2 million ($9 million to the developer plus $3 million to third parties, minus the $10 million in construction costs), the developer will
not build hotel, unless she has a way to collect some of the $3 million of public benefits.