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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.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Review of Political Economy.

Volume (Year): 18 (2006)
Issue (Month): 4 ()
Pages: 509-520

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Handle: RePEc:taf:revpoe:v:18:y:2006:i:4:p:509-520

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  1. Kavka, Gregory S., 1991. "Is Individual Choice Less Problematic than Collective Choice?," Economics and Philosophy, Cambridge University Press, vol. 7(02), pages 143-165, October.
  2. Coady, David P. & Parker, Susan W., 2002. "A cost-effectiveness analysis of demand- and supply-side education interventions," FCND briefs 127, International Food Policy Research Institute (IFPRI).
  3. Hicks, J. R., 1986. "A Revision of Demand Theory," OUP Catalogue, Oxford University Press, number 9780198285502, September.
  4. Mongin, P & d'Aspremont, C, 1996. "Utility Theory and Ethics," Papers 9632, Paris X - Nanterre, U.F.R. de Sc. Ec. Gest. Maths Infor..
  5. Young, David, 1996. "Changing Tastes and Endogenous Preferences: Some Issues in Modelling the Demand for Agricultural Products," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 23(3), pages 281-300.
  6. Bruno S. Frey & Alois Stutzer, . "Testing Theories of Happiness," IEW - Working Papers 147, Institute for Empirical Research in Economics - University of Zurich.
  7. Randall G. Holcombe & Russell S. Sobel, 2000. "Consumption Externalities and Economic Welfare," Eastern Economic Journal, Eastern Economic Association, vol. 26(2), pages 157-170, Spring.
  8. Mann, Stefan, 2003. "Why organic food in Germany is a merit good," Food Policy, Elsevier, vol. 28(5-6), pages 459-469.
  9. Brennan, Timothy J., 1989. "A Methodological Assessment of Multiple Utility Frameworks," Economics and Philosophy, Cambridge University Press, vol. 5(02), pages 189-208, October.
  10. Stefan Mann, 2004. "The expert valuation method for assessing agro-environmental policy," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 47(4), pages 541-554.
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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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