An economic 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.
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.
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.