Merit Good


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Merit Good

In economics, a good to which persons are believed to have a right. That is, a merit good is something that should be available for free or at reduced prices because it is necessary and the free market does not provide sufficient incentives to produce it. Examples of merit goods may include education and health care, though different jurisdictions define merit goods differently.
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For example, ordinary citizens regard an appendectomy as health care that is a merit good. But would they count cosmetic surgery?
We get leaders we deserve, and good citizens will merit good leaders.
All the children of the nation are our children who merit good education and care, the most important things and the bases for everything," HM the King said.
It begins with the motivation for electricity markets noting that what makes electricity special is its social and political concerns (i.e., it is a merit good) and discussing the unique (and well known) features of electricity that distinguish it from other commodities.
Policymakers are concerned about whether a household can afford to purchase a pre-defined quantity of a merit good. A household is said to "afford" such a purchase if it would be left with enough income to meet its other socially defined minimum needs.
The marginal utility of consumption of either the private good or the merit good is positive but diminishing.
Since this is pre-dominantly a 'merit good' catering mostly to poor households, there is a strong case for subsidising this level of education.
Furthermore, several economists hesitate as to whether the concept of public good is an exclusive tag for an economic event or whether one economic event can on the contrary be called at the same time a public and something else too (a private good, or a merit good).
Merit good: a good (or service) whose consumption by the poor is valued by society as a whole.
In his 1956 paper, A Multiple Theory of Budget Determination, economist Richard Musgrave introduced the concept of merit good, a valued good (such as education) that is under-consumed if provided by the market mechanism because positive social externalities are not internalized by individual consumers.
Congress seems to have decided that saving for retirement is a merit good that should be encouraged.