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Merit - Goods watch

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    The book I'm using (official ocr one) defines merit goods as a good that has more private benefits than the consumer realises.

    However, it also states that merit goods tend to have positive externalities associated with it.

    That is counter logical as positive externalities have more social benefits than private benefits.

    It also states that inoculations are an example of private goods. How do inoculations have more PRIVATE benefits than a consumer realises...?

    I can understand how inoculations can have positive externalities.

    Many Thanks

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    (Original post by KanKan)
    The book I'm using (official ocr one) defines merit goods as a good that has more private benefits than the consumer realises.

    However, it also states that merit goods tend to have positive externalities associated with it.

    That is counter logical as positive externalities have more social benefits than private benefits.

    It also states that inoculations are an example of private goods. How do inoculations have more PRIVATE benefits than a consumer realises...?

    I can understand how inoculations can have positive externalities.

    Many Thanks

    Posted from TSR Mobile
    I personally agree with you that it's counter logical since private benefits are when he or she benefits from and thus knows of, anything else is a social benefit. A merit good is a good whose consumption will cause significant positive externalities to society. Calling this "positive externality" a "private benefit" is wrong IMO.
 
 
 
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Updated: April 7, 2013
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