- Demerit good
Sometimes also referred to by the term "merit bad." A good or service available for purchase on the market that some "outside analyst" regards as intrinsically unhealthy, degrading, or socially damaging for other people to consume, regardless of the consumers' own desires, preferences and values. Examples of commodities often treated as demerit goods include tobacco, alcohol and other psychoactive recreational drugs; gambling devices; culturally taboo food products; sexually explicit art and literature; the services of prostitutes; the teaching of unconventional political, economic or religious doctrines; and the provision of disapproved medical services such as birth control counseling or abortion. With respect to such goods, it is often argued that the individual is not the best judge of his or her own welfare and that the government should therefore intervene in the marketplace to discourage the production, sale and/or consumption of demerit goods. Typical policy measures to accomplish this would include criminalizing the advertising, sale or possession of the good; stringent regulation of the market for the good so as to limit access to the good by particularly vulnerable subgroups of the population; and imposing high taxes on producing or purchasing the good in order to make it much more costly than economically necessary to potential consumers.
[See also: merit good]