Merit goods are a category of goods, introduced in the debate by Musgrave (1957), which individuals tend to under- or over-consume because their preferences are “irrational” or “defective.” This leads individuals to make suboptimal choices, which are detrimental to their well-being. Now, if they exist, merit goods must be produced by the government that must so to speak force individuals to consume the correct amount of these goods. In other words, the government must behave paternalistically.
The concept of merit goods was a precursor to the debates on paternalism within welfare economics. In particular, the interpretation of the merit goods concept through the meta-preferences approach helps in legitimizing legal intervention and achieving a more efficient regulation.
When Musgrave introduced the term “merit goods” (originally called merit wants), it was in an attempt to create a normative definition for government functions. Nevertheless, only three of the functions he studied in...
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Brennan G, Lomasky L (1983) Institutional aspects of ‘merit goods’ analysis. Finanzarchiv 41(2):183–206
Buchanan JM, Tullock G (1962) The calculus of consent: logical foundations of constitutional democracy. University of Michigan Press, Ann Arbor
Calabresi G (2016) The future of law and economics. Yale University Press, New Haven
Elster J (1979) Ulysses and the sirens: studies in rationality and irrationality. Cambridge University Press, New York
Etzioni A (1986) The case for a multiple utility conception. Econ Philos 2(2):159–183
Fiorito R, Kollintzas T (2004) Public goods merit goods and the relation between private and government consumption. Eur Econ Rev 48:1367–1398
Frankfurt HG (1971) Freedom of the will and the concept of a person. J Philos 68(1):5–20
George D (1998) Coping rationally with unpreferred preferences. East Econ J 24(2):181–194
Harsanyi J (1955) Cardinal welfare individualistic ethics and interpersonal comparisons of utility. J Polit Econ 63(4):309–321
Head JG (1966) On merit goods. Finanzarchiv 25(1):1–29
Head JG (1969) Merit goods revisited. Finanzarchiv 28(2):214–225
Hirschman AO (1984) Against parsimony: three easy ways of complicating some categories of economic discourse. Am Econ Rev 74(2):89–96
Jeffrey R (1974) Preferences among preferences. J Philos 71(13):377–391
Jones P, Cullis J (2002) Merit want status and motivation: the knight meets the selfloving butcher brewer and baker. Public Financ Rev 30(2):83–101
Kirchgässner G (2017) Soft paternalism merit goods and normative individualism. Eur J Law Econ 43(1):125–152
McLure CE (1968) Merit wants: a normative empty box. Finanzarchiv 27(2):474–483
Musgrave RA (1957) A multiple theory of budget determination. Finanzarchiv 17(3):333–343
Musgrave RA (1959) The theory of public finance: a study in public economic. McGraw-Hill Book Company, New York
Musgrave RA (1969) Provision for social goods. In: Margolis J, Guitton H (eds) Public economics. McMillan, London, pp 124–144
Musgrave RA (1987) Merit goods. In: Eatwell J, Milgate M, Neuman P (eds) The New Palgrave: a dictionary of economics. Macmillan, London, pp 452–453
Pazner EA (1972) Merit wants and the theory of taxation. Public Financ 27(4):460–472
Rawls J (1971) A theory of justice. Harvard University Press, Cambridge, MA
Roskamp KW (1975) Public goods merit goods private goods Pareto optimum and social optimum. Public Financ 30(1):61–69
Salanié F, Treich N (2009) Regulation in Happyville. Econ J 119(537):665–679
Schelling TC (1984) Self-command in practice in policy and in a theory of rational choice. Am Econ Rev 74(2):1–11
Sen AK (1977) Rational fools: a critique of the behavioural foundations of economic theory. Philos Public Aff 6(4):317–344
Sunstein CR, Thaler RH (2003) Libertarian paternalism is not an oxymoron. University Chicago Law Rev 70(4):1159–1202
Thaler RH, Sunstein CR (2008) Nudge: improving decisions about health, wealth, and happiness. Yale University Press, New Heaven
Ver Eecke W (2001) 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. J Socio-Econ 27(1):133–153
Wenzel HD, Wiegard W (1981) Merit goods and second-best taxation. Public Financ 36(1):125–139
West EG, MacKee M (1983) De gustibus Est disputandum the phenomenon of merit wants revisited. Am Econ Rev 7(5):1110–1121
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2019 Springer Science+Business Media, LLC, part of Springer Nature
About this entry
Cite this entry
Clément, V., Moureau, N. (2019). Merit Goods. In: Marciano, A., Ramello, G.B. (eds) Encyclopedia of Law and Economics. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-7753-2_663
Download citation
DOI: https://doi.org/10.1007/978-1-4614-7753-2_663
Published:
Publisher Name: Springer, New York, NY
Print ISBN: 978-1-4614-7752-5
Online ISBN: 978-1-4614-7753-2
eBook Packages: Economics and FinanceReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences