Scioally desirable merits goods Coursework Example | Topics and Well Written Essays - 1250 words

Scioally desirable merits goods - Coursework Example Discussion Merits goods are some of the products that are considered socially beneficial and in most cases, they tend to be under produced or consumed via the mechanism of the market; for instance, education, garbage collection, welfare services, and healthcare. These are the products and services, which the government of United Kingdom believes that citizens will under-consume, and goods that government ought to subsidize, provide free consumption or use to ensure that their consumption is not mainly dependent on the capacity to pay for them. Demerit goods are dangerous to the society and they include goods like illegal drugs such as alcohol, cigarettes, and other hard drugs, (Fiorito and Kollintzas, 2002, p.56). In demerits goods case, the market failure is prevalent as these products are over-consumed and are allowed to free market. Therefore, the government of United Kingdom should intervene and control overconsumption of demerit goods. For example, in drug cases, the government imposes increased regulations and taxes over their consumption. This implies increased prices to discourage people from consumption of such drugs. Since a number of demerit goods are damaging – socially undesirable – the government of United Kingdom imposes complete restrictions, which have been effective in avoiding their trade as well as consumption. Compared to public good, merit goods are offered via the market, however, not in adequate quantities to increased social welfare, therefore, the government and private sectors can provide both merit goods like education. Economists agree that merit goods are products that are essential to people and private sectors can also provide them, though differently. For instance, if merit goods are solely provided through private sectors, then the consumption rate tends to be low and thus the government has to intervene to correct such market challenge – failure. Studies indicate that merit goods such as education can be o ffered by free market but has various limitations if privately provided, (Throsby, 2005, p.78). Some of the challenges are that citizens may not have adequate amount of resources to purchase the merit good – education. Poor people would not afford to attend expensive education institutions, as they believe nothing will happen and if anything happens, they cannot afford to pay. Consequently, this results to inequitable income distribution as only the wealth will be highly literate and therefore, can earn increased income in the future. Therefore, if government provides the merit goods it benefits both the rich and poor people. For instance, equitable education - human capital investment – for all will enhance the growth of economy and general well-being for all. In addition, if private institutions offer education, some people will joint independent or private schools and if the government does not chip in and provide government or public schools, many families and peop le may not afford education either. This is because they may not afford the cost of education in private schools and this would increase the level of under-consumption of the merit goods, (Sherman, 2007, p.23). Consequently, there would be high crime rate and low productivity from majority of illiterate people who could not afford education in private sectors and this cause challenges for the labor market. Therefore, the role of the United Kingdom government in this concern is to regulate the affordability of