Interactive Glossary

BROWSE:

Merit goods:

In contrast to demerit goods, which are perceived as having a negative social value, merit goods (like education) are seen as having a positive social value. They would tend to be underprovided in a pure free-market economy. For example, vaccination programs keep disease levels low, but individuals responding only to market forces may be unable to afford the vaccination or not take into account the extent others benefit from reduced risk of being exposed to a disease. Without government intervention, there would be negative social effects.

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