market failure rwe

Question 1

merit good: direct provision (healthcare)

Answer 1

Hong Kong public healthcare system
- government provides all public healthcare services free of charge or for a small fee
- total expenditure in 2020: US$22.7 billion, highest in Asia
- highest life expectancy in the world: 85 for both sexes
- 2023 infant mortality rate: 1.2 deaths per 1000 live births
- Prince of Wales Hospital A&E: 8 hours
- the total waiting list for all specialist clinics in Hong Kong averages over 100 weeks

Question 2

merit goods: advertisement (sweet bev)

Answer 2

Got Milk? Campaign- United States
- launched in 1993 by the California Milk Processor board
-people substitute milk for sweetened beverages
1994- 7% increase of milk sold in California
-$23 million spent on advertising
-not effective in the long term: per capita consumption of fluid milk in the US decreased by 24% between 2000 - 2019
- criticised for neglecting lactose intolerant ppl

Question 3

merit good: gov reg (education)

Answer 3

1978- regulation of compulsory education for children aged 6-18
- Starting form 1978, every child in Hong Kong is required by law to attend a primary school after the child has attained the age of 6 and to attend a secondary school after primary education and is completed before he/she attains the age of 18
- Hong Kong primary students have ranked second among 43 countries and regions in a global reading literacy study
1986- 86.9% literacy rate
2023- 94.6% literacy rate

Question 4

demerit good: indirect tax [7]

Answer 4

Mexico sugary-sweetened drinks excise tax
- one peso per litre, equivalent to approximately 10% increase in price
- average urban mexican purchased 4.2L fewer taxed beverages
- 0.73 pesos increase in prices per litre for sugar
- producers: CocaCola reformulated their products and cut the sugar in their drinks to avoid the charges
- replaced 1.75L bottle with 1.5L bottle of normal Coca Cola
- increased the 1.75L bottles of Coca-Cola Zero sugar and diet coke to 2L
- 2016 expected tax revenue: 500 million euro, reduced to less than 300 million euro by 2017
- lower-socio- economic households, up to 17% decline by December 2014
- 4% increase in purchased bottled plain water

Question 5

demerit good: gov reg [4]

Answer 5

Hong Kong has prohibited the sale of tobacco products to persons under the age of 18
- since 1994
1993: 15-19 yr olds: 8.4%
2021: 1.2% smoking prevalence among Secondary 1 to 6 students
2016-17
toabcco control office (TCO)’s expenditure on smoking control amounted to $101.3 million
—–
monitoring: 8,066 inspections conducted in August to October 2017

Question 6

demerit good: advertisement

Answer 6

Quit in June Campaign + “Quit to Win” Smoke-free Community Campaign (launched in 2020)
- 70 recruitment sessions at smoking hotspots in all 18 Districts in Hong Kong, and motivate more than 1000 smokers in the community to make quit attempt.
2010: 22.9% smoking prevalence
2021: 9.5% smoking prevalence
2011: 7 000 fatalities are related to tobacco annually
- economic loss resulting from tobacco-induced health problems was estimated to be about HK$5.5 billion every year
- exposure to second-hand smoke for non-smoking spouses of smokers increases their risk of developing lung cancer by 20-30%

Question 7

demerit good: education

Answer 7

Interactive Education Theatre Programme
- since 1995
1993: 15-19 yr olds: 8.4%
- 2012 - 2017, only about 46% of all primary schools participated in the Programme
- delivered over 2,200 performances reaching over 620,000 students and teachers

Question 8

carbon tax

Answer 8

2019 Canada Carbon tax
- $65 per tonne in 2023 to $170 per tonne by 2030
- tax of $50 per ton of carbon dioxide emitted by facilities that emit more than 50,000 ton’s of carbon
result:
- reduce greenhouse gas emissions by 80 -90 million tons
cons- faced backlash from the governments of Ontario may have been politically motivated