Merit and Non Merit Goods: Meaning, differences and Examples (2024)
Merit goods and services are those goods which are promoted by the government. Government wants to promote the consumption of these goods to increase the welfare of the society. On the other hand non merit goods and services are those which are harmful for the society so government want to check the consumption of the non merit goods.
Merit goods are also known as the superior goods. Merit goods and services are those goods which are promoted by the government. The government wants to increase the consumption of these goods to increase the welfare of the society. If these goods & services are costly then government gives subsidy to promote consumption or sometimes provides free of cost to the poor.
Properties of Merit Goods;
1. Merit items are not served on the basis of consumer’s preference, but on the basis of government's preference. Hence government don’t ask people to provide the merit goods.
2. Merit goods are arranged by the government for a particular class of society, whereas social goods are arranged for all sections of the society.
3. Merit goods directly benefit their receivers and create social benefits as well. Construction of schools builds a literate society which creates a better country.
4. Merit goods releases positive externalities. Like subsidised food and free home to poor reduces the incidents of the crime in the country.
5. Merit goods can be personal goods.
Examples of Merit Goods;
1. Providing free home to poor (Pradhanmnatri Aawas Yojna)
2.Proving subsidised food to poor ( Antyodaya Ann Yojna which provides wheat, rice at cheap rate to poor)
3. Medicines given in government hospitals and nutritional food given to children at the Agnavadi centers
4. Public Library, Public parks etc.
5. Hospitals and school
Definition of Non Merit Goods;
Government bans the goods and services which are seem to be harmful for the society. So such goods are called non-merit goods. Government wants to check the use of such goods and services for the welfare of the society.
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Properties of Non-Merit Goods;
1. These goods have negative externalities because they affect others without compensating them. A smoker not only affects his/her health but also peoples standing surroundings him/her.
2. Generally these goods are too costly. Government imposes higher taxes on non-merit goods to curb the consumption of these goods. You must have observed that government imposes very high rate of taxes on the cigarettes, liquor and other intoxicating items every year.
3. These goods can also be private.
Examples of Non-Merit Goods;
1.Liquor, high caffeine energy drinks, Drugs, Opium and cigarettes
2. Violence promoting movies and games like the government banned the PUBG and blue whale games.
3. Hands free mobile phones in vehicles
4. High fat, salt and sugar containing foods (Government has banned the sale of pizza, burger, pastries and other fat oriented foods)
So the awareness about the merit and non merit goods is very important not only for the general public but also for aspirants of different competitive exams because many times interview board has asked the questions related to the difference between these two types of goods.
Merit goods are goods for which the social benefits of consumption outweigh private benefits, whereas demerit goods are goods for which the social costs of consumption outweigh private costs. Merit goods are under-provided by markets. Healthcare and education are examples of merit goods.
On the other hand non merit goods and services are those which are harmful for the society so government want to check the consumption of the non merit goods. Definition of Merit Goods; Merit goods are also known as the superior goods. Merit goods and services are those goods which are promoted by the government.
Examples of merit goods include education, health care, welfare services, housing, fire protection, refuse collection and public parks. In contrast to pure public goods, merit goods could be, and indeed are, provided through the market, but not necessarily in sufficient quantities to maximise social welfare.
In a free market, merit goods are under-consumed due to positive externalities, while demerit goods are over-consumed due to negative externalities. These goods are not taxed at lower rates to promote consumption. Demerit goods are heavily taxed to discourage consumption, leading to negative externalities.
Public goods such as street lights are defined as goods which are non-excludable and non-rivalrous in consumption, while merit goods such as education are goods deemed socially desirable by the government. Street lights are non-excludable in consumption while education is excludable in consumption.
The concept of merit goods assists governments in deciding which public or other goods should be supplied. Merit goods are commodities that the public sector provides free or cheaply because the government wishes to encourage their consumption.
A judge decides a case "on the merits" when he/she bases the decision on the fundamental issues and considers technical and procedural defenses as either inconsequential or overcome. Example: An attorney is two days late in filing a set of legal points and authorities in opposition to a motion to dismiss.
Merit goods are those goods and services that the government feels that people will under-consume, and which ought to be subsidised or provided free at the point of use so that consumption does not depend primarily on the ability to pay for the good or service.
Merit goods are the opposite of demerit goods - they are goods which are deemed to be socially desirable, and which are likely to be under-produced and under-consumed through the market mechanism.
Non-excludable goods are goods that people can consume without paying for them, such as public roads, national defense, or clean air. Non-rival goods are goods that do not diminish in quantity or quality when more people use them, such as digital content, knowledge, or radio broadcasts.
Ethics and theology clearly distinguish two kinds of merit: Condign merit or merit in the strict sense of the word (meritum adœquatum sive de condigno), and. congruous or quasi-merit (meritum inadœquatum sive de congruo).
Examples of merit goods include education, healthcare services, public transportation and renewable energy. Education is often considered a merit good because it provides benefits not just to the individual student, but also to society as a whole.
To be classified as a public good, the product or service must remain non-excludable and non-rivalrous. The types of public goods include security, education, knowledge, infrastructure, environment and health.
Examples of public goods include fresh air, knowledge, national defense, street lighting, etc. Common resources are defined as products or resources that are non-excludable but rival. That means virtually anyone can use them.
The phrase “on the merits” refers to a case whose decision rests upon the law as it applied to the particular evidence and facts presented in the case. This is in opposition to cases whose decisions rest upon procedural grounds.
A court will dismiss a lawsuit as being frivolous or without merit if it finds: There are no reasonable or factual grounds to support the underlying claim. The lawsuit was intended to harass or to tie up the defendant in litigation.
Civil service, also known as the merit system, was created to assure that the recruitment and retention of a qualified work force, and, the selection and promotion of employees providing public services and compensated by tax dollars is conducted in a fair and impartial manner and in a competitive fashion.
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