Barnett Prize MatthewBradfield

Authors Avatar

Barnett Prize                                                Matthew Bradfield

There are some economists who would claim that smoking is a perfect example of market failure. The definition of market failure is very simple; it is when the market mechanism fails to allocate resources efficiently in one or more of the following four fronts: Social Efficiency; Allocative Efficiency; Technical Efficiency; Productive Efficiency.

        Smoking is an example of market failure because it fails to allocate resources in a socially efficient way. When someone buys a pack of cigarettes they do not take into consideration the effects of other people’s health because of second hand smoke or the fact that they are taking up valuable resources from the national health services when the majority of people who smoke for a long time end up needing medical major medical help, which is paid for by the taxes of the society that the smoker lives in. this shows that eth resources are not put in a socially efficient way and so we see this as an example of market failure.

Join now!

        There are several sides to the argument on whether or not the government should increase the taxation on cigarettes. Firstly, the government says that smoking is very dangerous to your health with around 120,000 people dying a year from smoking and that is just in the UK. The government say that in this new and enlightened and educated era in history the general public do know the damage that cigarettes to their health and now the health warnings on the pack do also add to this knowledge.

 When smokers get ill from smoking, be it cancer emphysema or any number ...

This is a preview of the whole essay