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Merit goods in a utilitarian framework

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  • Stefan Mann

Abstract

Merit goods are defined here as goods for which government interference with the aggregated willingness to pay increases utility. The paper argues that three cases exist where consideration for merit goods would lead to a Pareto improvement and where merit goods should therefore be reintegrated into the public economics framework. The state may be better informed about the conditions for the possibility of certain consumer wants. In cases of multiple preference orders within one person, the state may need to play a role if market preferences and reflective preferences are to converge. And the state may be needed to internalize psychological externalities. The inclusion of the merit goods concept may explain how some policies, like schooling policy, may increase overall well-being, whereas the classical public economics framework is unable to do so.

Suggested Citation

  • Stefan Mann, 2006. "Merit goods in a utilitarian framework," Review of Political Economy, Taylor & Francis Journals, vol. 18(4), pages 509-520.
    • Handle: RePEc:taf:revpoe:v:18:y:2006:i:4:p:509-520
    DOI: 10.1080/09538250600915691
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    1. Ver Eecke, W., 1998. "The concept of a "merit good" the ethical dimension in economic theory and the history of economic thought or the transformation of economics into socio-economics," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 27(1), pages 133-153.
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    9. Mann, Stefan, 2003. "Why organic food in Germany is a merit good," Food Policy, Elsevier, vol. 28(5-6), pages 459-469.
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    Cited by:

    1. Elodie Brahic & Valérie Clément & Nathalie Moureau & Marion Vidal, 2008. "A la recherche des Merit Goods," Working Papers 08-08, LAMETA, Universtiy of Montpellier, revised Jun 2008.

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