Merit Good


Health Economics

  • A good or service whose consumption is regarded (by someone influential) as being unusually meritorious. It is generally associated with the idea that people are not consuming enough of something and that it would be good for them (or society) if they consumed more. But the claim is not being made on externality grounds or because of market failure and seems inherently paternalist (for example, a belief that people are myopic or ignorant). Education is often cited as an example of a merit good; health care is rarely so cited. The grounds for this asymmetry are obscure. The term originated with Musgrave (1957).