Why organic food in Germany is a merit good

The conventional view of welfare economics is that subsidies for organic food are inefficient. This paper challenges this view and argues that subsidies for organic food may be justified by the concept of individualistic merit goods. Therefore, the concept of individualistic merit goods is briefly reviewed. Market preferences and reflective preferences for organic food in Germany are described. It is then shown how they relate to political preferences. Finally, it is argued how economic theory in general and food policy in particular should take account of the existence of merit goods.