Difference between a public and merit good, explain how a government can ensure that the optimal quantity of a merit good is provided and consumed
Differences between public goods and merit goods
Definition of public goods is simply when given those goods that are collectively consumed and do not reduce in size on consumption. These are public goods and include parks, defence, law, street lights among others. There is usually no marginal costs in producing in producing these products hence the society argues that they should be given free. These goods are also non-excludable, meaning they can be used by everyone. Charging of these products will hence be difficult and so the government should provide for free and recover from taxes collected from the community.
Merit goods can be considered as products that are distributed based on need. They have positive externalities associated with their consumption. They can be supplied by the free market although the quantities will be wrong. Examples of merit goods are education and to some extent, health care. The state provides them as “good for you”.
Ensuring that optimal quantity of merit good is provided and consumed
Providing free health care and education can be very expensive. The government should ensure proper allocation of funds to these areas. This will guarantee that everyone has access to good education and health. With free health care and an assurance of wellness by the population, most services will be affected hence well planning ought to be embraced by the necessary fund allocators
For the government to ensure that the best quantity of merit good is provided and consumed it has to focus on the manner in which goods ought to be distributed. Distribution of the goods should be well done. Remote areas have less hospitals and schools unlike urban areas where they are congested. This makes it hard for the people in rural areas to access the hospitals and schools. The government should ensure that each region has a merit good that is well maintained and guarantee that more universities be built to meet the rising population.
The insurance scheme should also be affordable. For those who are not in employment, it should be provided for by the government by raising premiums from the rich class to cater for the needy. This will offer everyone an opportunity to have access to the merit goods uniformed standards of education are a field that the government should look at to assist the employers in their recruiting of jobs. The upper class has mostly had the better education making most of the needy people being left out. The government should also privatize some sectors in order to improve quality. Private sectors can be involved in building roads, constructing hospitals and also doing supplies. They have been known to be more efficient than government sectors.
The fire services which are also classified as good merits should be available to all people including those from remote areas. They should be quick to deliver and the government should improve on that. Infrastructure has been the main hindrance of these developments because with poor roads, patients and students are unable to access these merit facilities. The state should ensure proper infrastructure in all areas are set and that in case of any activities there is free flow of services without interference.
