What is an Economic Bad?

What is an Economic Bad?

What is an Economic Bad? Jonathan Poland

An economic bad refers to a negative outcome or impact that results from business activity and consumption. This is in contrast to an economic good, which refers to a positive outcome or impact. Economic bads may arise as a consequence of producing goods, and it is important for economic systems to consider and account for both economic goods and bads. The following are illustrative examples of an economic bad.

Pollution such as air pollution. For example, a factory that produces $1 million in goods per month and $7 million in damages to quality of life due to air pollution.

Loss of Resources
Loss of resources such as poorly managed agriculture that results in soil erosion.

Unhealthy Food
A food item that causes poor health and disease.

An economic process such as transport that results in noise pollution.

Risk such as a highly speculative investment product that constitutes a risk to the stability of a financial system.

Loss of privacy such as a company that loses confidential data about customers to a malicious entity.

Misinformation such as a promoter of an investment that spreads false rumors.

Destruction of Value
Incentives or systems that destroy value. For example, an executive who stands to make a great deal of money if a company is sold, even if the stock declines 90% before the sale occurs. An example of perverse incentives.

Quality of Life
Other impacts to quality of life such as loss of freedom, stress and fear. For example, a pollution emergency that restricts people’s freedom of movement as it’s dangerous to go outdoors.

Learn More
Manufacturing 150 150 Jonathan Poland


Manufacturing is a critical phase in business development, especially for companies that produce physical goods. The synergies between manufacturing and…

What is Knowledge? Jonathan Poland

What is Knowledge?

Knowledge is the understanding, skills, and expertise that humans acquire through experience, education, and research. It can take many forms,…

Agency Cost Jonathan Poland

Agency Cost

An agency cost is an inefficiency that arises when there are differences in the motivations and access to information between…

Customer Persona Jonathan Poland

Customer Persona

A customer persona is a fictional character that represents a specific type of customer that an organization is targeting with…

Technical Requirements Jonathan Poland

Technical Requirements

Technical requirements are specifications for a technology such as a system or application. It is common to define technical requirements…

Production Jonathan Poland


Production is the process of creating goods or services for the purpose of satisfying consumer demand. It involves a range…

Target Audience Jonathan Poland

Target Audience

A target audience refers to the specific group of individuals or consumers that a business or organization is trying to…

Military Contracts 150 150 Jonathan Poland

Military Contracts

Military spending contracts are agreements between a government or its defense department and private companies or suppliers for the provision…

Data Infrastructure Jonathan Poland

Data Infrastructure

Data infrastructure refers to the hardware, software, and network resources that support the collection, storage, processing, and analysis of data.…

Content Database

Search over 1,000 posts on topics across
business, finance, and capital markets.

Digital Goods Jonathan Poland

Digital Goods

Digital goods are products that are delivered and consumed in digital form, rather than as a physical object. These goods…

Process Automation Jonathan Poland

Process Automation

Introduction: Process automation refers to the use of information systems to automate business processes in order to improve efficiency and…

Blockchain Jonathan Poland


Blockchain is a type of distributed database that allows multiple parties to store, share, and access data in a secure…

Price Economics Jonathan Poland

Price Economics

Price economics, also known as pricing strategy, is the study of how businesses determine the price of their products and…

Implementation Risk Jonathan Poland

Implementation Risk

Implementation risk refers to the potential negative consequences that a business may face as a result of difficulties or failures…

Ai Websites (Q3 2023) Jonathan Poland

Ai Websites (Q3 2023)

A simple resource dump of Ai websites we found during Q3 2023. Human AI Ethical, transparent, and beneficial AI development…

Supplier Risk Jonathan Poland

Supplier Risk

Supplier risk refers to the risk that a supplier will not fulfill their commitments to an organization, which could result…

Preventive Maintenance Jonathan Poland

Preventive Maintenance

Preventive maintenance is a type of maintenance that is designed to prevent failures and extend the lifespan of assets, including…

Remarketing Jonathan Poland


Remarketing is a marketing strategy that involves targeting customers who have previously interacted with a business. This is often done…