Difference between revisions of "Merit good"
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| − | A '''merit good''' is a product ([[good]]) or service that | + | A '''merit good''' is a product ([[good]]) or service that is considered so essential or desirable that it should not be distributed based on willingness or ability to pay. It is generally provided by [[government]] intervention, because it is believed that if it was left to the individuals ability to pay, these goods or services would not be demanded in sufficient quantities to maximize the welfare of individuals and society. |
| + | The state is concerned with maximizing the consumption of certain goods which it deems to be desirable; goods and services where the social benefits exceed the private benefits. Examples are public hospitals, libraries, parks and municipal golf courses. | ||
[[category:economics]] | [[category:economics]] | ||
Revision as of 14:05, August 6, 2010
A merit good is a product (good) or service that is considered so essential or desirable that it should not be distributed based on willingness or ability to pay. It is generally provided by government intervention, because it is believed that if it was left to the individuals ability to pay, these goods or services would not be demanded in sufficient quantities to maximize the welfare of individuals and society. The state is concerned with maximizing the consumption of certain goods which it deems to be desirable; goods and services where the social benefits exceed the private benefits. Examples are public hospitals, libraries, parks and municipal golf courses.