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
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.

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

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

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

Misinformation
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…

Examples of Tact Jonathan Poland

Examples of Tact

Tact is the ability to sensitively and skillfully handle a situation or…

Security Controls Jonathan Poland

Security Controls

IT security controls are measures that are implemented in order to reduce…

Captive Market Jonathan Poland

Captive Market

A captive market is a market where a group of customers is…

Types of Market Research Jonathan Poland

Types of Market Research

Market research is the process of systematically gathering and analyzing information about…

Customer Convenience Jonathan Poland

Customer Convenience

Customer convenience refers to any aspect of the customer experience that makes…

Prototyping Jonathan Poland

Prototyping

A prototype is a preliminary version of something that is used to…

Brand Identity Jonathan Poland

Brand Identity

Brand identity refers to the overall image and perception that a company…

Communication Channels Jonathan Poland

Communication Channels

A communication channel refers to the various means of transmitting information and…

Decision Automation Jonathan Poland

Decision Automation

Decision automation refers to the use of technology to automate the process…

Jonathan Poland © 2023

Search the Database

Over 1,000 posts on topics ranging from strategy to operations, innovation to finance, technology to risk and much more…

Employability Jonathan Poland

Employability

Employability refers to the value that an employee brings to an employer.…

Business Goals Jonathan Poland

Business Goals

Business goals are targets that an organization sets for itself in order…

Net Nuetrality Jonathan Poland

Net Nuetrality

Net neutrality is the principle that all internet traffic should be treated…

What is a Self-Replicating Machine? Jonathan Poland

What is a Self-Replicating Machine?

Self-replicating machines are robots or nanobots that are capable of producing copies…

Onboarding Jonathan Poland

Onboarding

Onboarding is the process of introducing a new employee to an organization…

Substitution Pricing Jonathan Poland

Substitution Pricing

A substitution price is the price at which a customer will choose…

Personal Selling Jonathan Poland

Personal Selling

Personal selling is a type of sales approach that involves face-to-face interaction…

Sales Tactics Jonathan Poland

Sales Tactics

Sales tactics are specific strategies or approaches that salespeople use to persuade…

Examples of an Argument Jonathan Poland

Examples of an Argument

An argument is a series of statements or reasons that support a…