Bad (economics)

Item with negative value to the consumer

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In economics, a bad is the opposite of an economic 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. Similarly, a disservice is the opposite of a service.

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, as when money is exchanged for a car. With a bad, however, both money and the object in question go the same direction, as when a household gives up both money and garbage to a waste collector being compensated to take the garbage. 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.

## References

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* Varian, Hal R. (2006). Intermediate Microeconomics. London: W.W. Norton & Company. p. 41.

## See also

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