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((Short description|Thing that satisfies human wants but at unhealthy physical or behavioral cost))
((multiple issues|((refimprove|date=November 2016))
((Original research|date=February 2009))))
In [[economics]], a '''demerit good''' is "a [[Good (economics and accounting)|good]] or [[Service (economics)|service]] whose consumption is considered unhealthy, degrading, or otherwise socially undesirable due to the perceived negative effects on the consumers themselves";<ref>((Cite web |url=http://definitions.uslegal.com/d/demerit-good%20/ |title=Demerit Good Law & Legal Definition |website=USLegal.com))</ref><ref>((Cite web |url=http://www.businessdictionary.com/definition/demerit-good.html |title=Definition of demerit good |website=BusinessDictionary |access-date=2016-11-17 |archive-date=2016-11-17 |archive-url=https://web.archive.org/web/20161117212413/http://www.businessdictionary.com/definition/demerit-good.html |url-status=dead ))</ref><ref>((Cite web |url=http://www.economicshelp.org/blog/glossary/demerit-goods/ |title=Demerit good definition |last=Pettinger |first= Tejvan  |date=November 28, 2012 |website=Economics Help))</ref> it could be over-consumed if left to market forces of [[supply and demand]]. Examples of demerit goods include [[tobacco]], [[alcoholic beverage]]s, [[recreational drugs]], [[gambling]] and [[junk food]]. Because of the nature of these goods, [[government]]s often levy [[taxes]] on these goods (specifically, [[sin tax]]es), in some cases regulating or banning consumption or advertisement of these goods.<ref>((Cite web |url=http://www.sanandres.esc.edu.ar/secondary/economics%20packs/microeconomics_sl/page_119.htm |title=Government responses - demerit goods |publisher=sanandres.esc.edu.ar))</ref>

==Concept==
There is an important conceptual distinction between a demerit good and a [[negative externality]].  A negative externality occurs when the consumption of a good has measurable negative consequences on others who do not consume the good themselves.<ref>((Cite web |url=http://www.economicsonline.co.uk/Market_failures/Demerit_goods.html |title=Demerit Goods |website=Economics Online|date=17 January 2020 ))</ref>  Pollution (due, for example, to automobile use) is the canonical example of a negative externality. By contrast, a demerit good is considered as undesirable because its consumption has negative effects upon the consumer. [[Cigarette]]s have both properties – they are a demerit good because they damage the smoker's own health, but they also produce the negative externality of damage to others by [[second-hand smoke]].

Two fundamental opinions of [[welfare economics]], [[welfarism]] and [[paternalism]], differ in their conceptual treatment of 'demerit goods'.  Simply, welfarism considers the individual's ''own'' perception of the utility of a good as the final judgement of the utility of the good for that person, and thereby disallows the concept of a 'demerit good' (while allowing the analysis of negative externalities).  As an extreme example, if a [[heroin addict]] purchases heroin, they must have done so because heroin makes them better somehow, and this transaction is considered therefore as a net social positive (assuming that the addict does not commit any other crimes as the result of their addiction). Paternalism judges that heroin "isn't good for you", and feels free to override the judgement of the addicts themselves.<ref>((cite book |last1=Niel |first1=Bruce |last2=Boadway | first2=Robin W |title=Welfare economics |year=1984 |url=https://archive.org/details/welfareeconomics0000boad |url-access=registration |publisher=John Wiley and Sons |isbn=9780631133278))</ref>

==See also==
* [[Pigovian tax]]
* [[Soda tax]]
* [[Alcohol law#Taxation and regulation of production|Taxation and regulation of alcohol production]]
* [[Cigarette taxes in the United States|Tobacco tax]]

==References==
((reflist))

==Further reading==
* ((cite book|title=Welfare Economics|url=https://archive.org/details/welfareeconomics0000boad|url-access=registration|last1=Boadway|last2=Bruce|publisher=Basil Blackwell|year=1984|isbn=9780631133278))

((Goodtypes))

[[Category:Goods (economics)]]

((trade-stub))

[[de:Demeritorisches Gut]]

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