demerit goods

The agreement also did not cover demerit goods such as tobacco.

The essence of merit and demerit goods is to do with an information failure to the consumer.

Sometimes, merit and demerit goods are simply seen as an extension of the idea of externalities.

However, merit and demerit goods can be defined in a different way which makes it different from externalities.

Examples of demerit goods include tobacco, alcoholic beverages, recreational drugs, gambling, junk food and prostitution.

Two fundamental views in welfare economics, welfarism and paternalism, differ in their conceptual treatment of 'demerit goods'.

The CVP calls for reforms of the social security system, by raising taxes on demerit goods (e.g. tobacco taxes) to generate more revenues for the pension funds.

Political factors may also include goods and services which the government wants to provide or be provided (merit goods) and those that the government does not want to be provided (demerit goods or merit bads).

Its campaigns can either encourage merit goods, as for example fund raising for not-for-profit organizations or dissuade the use of demerit goods promoting society's well being, as Non-smoking campaigns or promote the use of seat belts.