Bad (economics)  

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Train wreck at Montparnasse (October 22, 1895) by Studio Lévy and Sons.
Train wreck at Montparnasse (October 22, 1895) by Studio Lévy and Sons.

In economics, a bad is the opposite of a good. A "bad" is anything with a negative value to the consumer, or a negative price in the marketplace. Refuse is an example of a bad.

A bad is a physical object that lowers a consumer's level of happiness, or stated alternately, a bad is an object whose consumption or presence lowers the utility of the consumer.

With normal goods, a two-party transaction results in the exchange of money for some object, e.g. money is exchanged for a car. With a bad, however, both money and the object in question go the same direction, e.g. a household loses money and the garbage. The waste collector is being compensated to take the object from the consumer. In this way, garbage has a negative price; the waste collector is receiving both garbage and money, and thus is paying a negative amount for the garbage.

Goodness and badness are an inherently subjective declaration, however. As an example: two diners at a restaurant discover that the "secret ingredient" in the house specialty is peanuts. One of the diners is a peanut-lover, and the other is allergic to peanuts. In this case, peanuts are, in the same time and in the same place, both a good and a bad in economic terms.

Additionally, a good consumed by the same individual can turn into a bad over time, and vice versa; the nicotine from cigarettes may give a smoker a feeling of relieved anxiety and reduced stress. Continuing, long-term consumption of cigarettes, however, may have serious adverse effects on a smoker's health, thus turning the utility of cigarettes into the negative. On the other hand, some forms of medical treatment or side effects of medication may seem rather unpleasant to a patient at the time of treatment, but will greatly improve their health and well-being in the long run.

See also

  • Chore division - the problem of fairly dividing a heterogeneous bad among agents with different preferences.

Unless indicated otherwise, the text in this article is either based on Wikipedia article "Bad (economics)" or another language Wikipedia page thereof used under the terms of the GNU Free Documentation License; or on original research by Jahsonic and friends. See Art and Popular Culture's copyright notice.

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