Advantages Of Merit Goods

Decent Essays
Merit goods are a concept first introduced By Richard Musgrave in 1957. Merit goods are goods that are considered worthy of being consumed by all, regardless of consumer’s willingness or ability to pay (Musgrave, 1959). Consumers receive a strong benefit from merit goods, whether or not they recognize it. There are several reasons that a consumer could fail to see the correct worth of a good, whether through lack of complete information, distorted preferences due to advertising, or overvaluing the short term costs compared to long term benefits. Musgrave believed that “there may arise a distortion in the preference structure that needs to be counteracted” (Musgrave, 1959), mainly through government intervention, in the form of full or partial …show more content…
Therefore government intervention is required to help limit the consumption of these goods. An example of a demerit good alcohol and its abuse which is a significant problem in New Zealand. New Zealand has a strong culture of binge drinking (Towl, 2004) . Binge drinking has numerous adverse health effects, including risk of brain damage and death, and increased risks of cancer in the long term. There are also negative social effects of binge drinking, which can include increased violence and accidents, and a greater risk of unwanted sexual activity (Towl, 2004). The concepts of demerit and merit goods are goods which are perceived to be objectively good or bad for the consumer, but will not be consumed in the appropriate amounts if left to consumer …show more content…
Externalities are consequences, either positive or negative, that the consumption of a particular good has on those not consuming the said good. Education is a merit good, as it produces a greater quality of life for those who consume it. However it also has positive externalities, as it can create a stronger economy through creating more productive workers (Psacharopoulos, 1996). Alcohol abuse in the form of binge drinking also creates externalities, although these externalities are negative. Binge drinking creates a negative externality in the form of increased crime levels within society, and increased risk of car accidents. These can affect everyone, regardless of what their personal views on the consumption of alcohol are. Externalities often require government intervention, as the consequences of the consumption or production of the good are not felt directly by those consuming or producing the good, but instead by society as a whole. Therefore market forces are not adequate to control the supply and demand, as market forces cannot represent the true utility and price of the goods. Government intervention in the case of education is implemented by making basic schooling compulsory, which began in New Zealand in 1877 with The Education Act. New Zealand also has a minimum leaving age of 16, which

Related Documents

  • Improved Essays

    The approach emphases on rising awareness of the short and also the long-term impacts of ‘risky’ drinking among young people, and overtime, which contributes to the development of a more accountable drinking culture within Australian humanity. In the year 2008, the Australians government announced that $103.5 million national binge drinking strategy within an initial commitment of $53.5 million throughout 2008-2012. This demonstrates that alcohol consumption is a public health issues which not only affects individual’s life general public and lot of money is being invested on this issue (Alcohol,…

    • 806 Words
    • 4 Pages
    Improved Essays
  • Great Essays

    Most people have a confused idea of alcoholism as a disease that invades or attacks your good health. Use of such a strong word such as "disease" shapes the values and attitudes of society towards alcoholics.…

    • 1888 Words
    • 8 Pages
    Great Essays
  • Improved Essays

    1.0 Intervention Setting The Australian National Binge Drinking Campaign ‘Don’t Turn a Night out into a Nightmare’ was first launched on 21st November 2008. The primary target audience for the campaign is young people aged 15 to 25, with the secondary target being the parents of these young adults. The campaign is an integral aspect of the National Binge Drinking Strategy and is a program that formed partnerships with sporting groups and non-government organisations and are displayed in a variety of environments that have the ability to impact on the culture of binge drinking (Australian Government, 2010). These displays are evident on the campaigns website, public posters in sporting facilities, schools, workplaces, hospitals and other community…

    • 1449 Words
    • 6 Pages
    Improved Essays
  • Improved Essays

    Annotated Bibliography Wechsler, Henry, and Bernice Wuethrich. Dying to Drink: Confronting Binge Drinking on College Campuses. Emmaus, Pa.: Rodale, 2002. Print. Scholarly…

    • 1038 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    Under the normativist theory of disease as described by Joseph Margolis, diseases are identified as conditions that are considered departures from social norms or values. The notion of value judgements is used to determine whether such a condition is considered socially normal or abnormal. Margolis claims that it is necessary to use value judgements to determine whether something is a disease or not, and that certain diseases must invoke the use of value judgements in their diagnosis, because not much is understood about their biological etiology. In this paper, I will attempt to support Margolis’ claim about the normativist view of disease by arguing that alcoholism is a disease, in the normativist sense.…

    • 1157 Words
    • 5 Pages
    Improved Essays
  • Improved Essays

    In a country infused with varied socio-cultural traditions revolving around alcohol consumption and promotions within popular media portraying its potential for pleasure and enjoyment, the presence and influence of alcohol becomes inescapable. Such prevalence of alcohol within American society raises a question concerning the appropriate minimum legal drinking age (MLDA) for an increasingly dynamic culture. The National Minimum Drinking Age Act of 1984 punished states that allowed persons below age 21 to purchase and consume alcohol by withdrawing highway funding. Consequently by 1987, all 50 states had adopted an MLDA of 21. However despite current nationwide restriction, drinking remains commonplace among a high percentage of youth.…

    • 1139 Words
    • 5 Pages
    Improved Essays
  • Improved Essays

    National Binge Culture

    • 1112 Words
    • 5 Pages

    Binge drinking is a dangerous habit that kill too many underage drinkers in The United States. Driving under the influence of alcohol also kills innocent Americans every year. Taking a more European stance on drinking could alleviate these epidemics. Lowering the drinking age could help curb the obsession with alcohol that underage drinkers have making everyone much safer. Drunk driving and Binge drinking will not end overnight, but if the nation makes more strides to make alcohol a beverage to be used responsibly by everyone and not a novelty that is abused by those who cannot have it, the death tolls caused by alcohol will…

    • 1112 Words
    • 5 Pages
    Improved Essays
  • Improved Essays

    In 1984 the legal drinking age was raised from 18 to 21; Keeping this in mind Centers for Disease Control and Prevention found that “people aged 12 to 20 years drink 11% of all alcohol consumed in the United States” (“Fact Sheets - Underage Drinking.”). This rise in age not only blew up within society and media but also created a platform for a new debate over the 21 vs 18 drinking age. A plethora of people all across the nation have joined the debate and added their two cents to the argument. Many sources provide overwhelming amounts of evidence and facts to create a compelling argument that the drinking age should be lowered. One of the issues with drinking is that some individuals have become irresponsible and consume too much in such…

    • 395 Words
    • 2 Pages
    Improved Essays
  • Improved Essays

    Alcohol has become increasingly accessible over the past two decades, increasing the injuries and deaths among society (about the campaign, n.d.). For the purpose of this essay, the definition of binge drinking is the consumption of five or more alcoholic drinks during a sitting, causing the consumer to become intoxicated (Tomsovic, 1974, as cited in Courtney, Polich, 2009). In the last 10 years there…

    • 1169 Words
    • 5 Pages
    Improved Essays
  • Great Essays

    Alcohol consumption on college campuses in the United States and its associated problems has been well documented in the past five decades. Data from the National Institute on Alcohol Abuse and Alcoholism (2004) show that approximately one thousand four hundred college students die annually from excessive alcohol consumption while an additional five hundred thousand sustained all kinds of injuries. The data also revealed that 70,000 sexual assault cases that are reported by college students are alcohol related as are nearly two-thirds of suicides on college campuses. The problem related with excessive consumption of alcohol does not end on campus. Clements (2004) stated that 40 percent of students who drink excessive alcohol while in college…

    • 1327 Words
    • 6 Pages
    Great Essays
  • Improved Essays

    There is always the conception that extensive rules and regulation which the Australia government placed among its citizens are slowly taking the personal freedoms to take risk away from the individuals. Although the restrictions placed upon its people have certainly help Australia government to earn its reputation as a ‘Nanny State’. It can be argued that we are not in the danger of becoming a nanny state as long as the restrictions are reasonable. This essay will focus on how the rules and regulation posed by the government on two of the most controversy topics: smoking and alcohol are able to influence the behaviours of its citizens in the hope to reduce health risks. In addition, by examining the health impacts and the interventions adopted…

    • 1071 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    Meritocracy could be construed to be flawed, as it is basing Australia to be a classless society that rewards its citizens for their abilities and talents. Kimball (1995) relates working concepts of meritocracy are closely linked to science. Science is believed to be true and objective, a more ‘meritorious’ type of knowledge that accurate people, methodologies and ideas. Science automatically assumes that science is elevated above other forms of knowledge which becomes apparent in scientists one way method of communication, and that there is nothing to be gained by a non scientific person (Kimball, 1995, p.141).…

    • 1139 Words
    • 5 Pages
    Improved Essays
  • Superior Essays

    Have you ever wonder why people purchase certain products? Some consumers want to demonstrate superiority when it comes to self and products. Spending money on product is part of our economic. In this paper, we will discuss conspicuous consumptions and we will attempt to explain what conspicuous consumptions is and how it is important for marketers to understand why consumers purchase luxury items.…

    • 968 Words
    • 4 Pages
    Superior Essays
  • Improved Essays

    For the private, the process of being educated is the process of enjoying learning. With the help of education, people get more than they expect, especially the sublimation of spirit. Moreover, it is a method to accumulate human capital. Human capital is a stock of knowledge, skills and creativity. Students develop their comprehensive skills through education, increasing their competitiveness in labor market.…

    • 936 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    The young adult’s developmental pathway is a stage of life that includes the challenges of independence, the reward for achievement, and the endurance of crises (Nagy, 2013, p. 422.) This essay will describe and discuss the physical, cognitive and psychosocial characteristics of the young adulthood lifespan stage. Two theorists that relate their developmental research to this life span, Erikson and Piaget, are described and the discussion of two health related behaviours applicable to the young adult. In young adulthood, physical development and abilities are at their peak between the ages of 20-30 years.…

    • 1576 Words
    • 7 Pages
    Improved Essays