merit goods

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Goods or services whose consumption is believed to confer benefits on society as a whole greater than those reflected in consumers' own preferences for them. A good may be classed as a merit good if it causes positive externalities. Education is typically cited as an example. In the absence of government intervention individual choice will lead to under-consumption of a good causing a positive externality. Such merit goods are therefore sometimes subsidized by the government, or directly provided. A good can also be classed as a merit good through paternalism: the government decides that it is better informed than consumers about what is good for them, and chooses to override consumer sovereignty to ensure consumption. Examples are compulsory primary education and compulsory vaccination of children in many countries.

Subjects: Economics.

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