Chips - a demerit good.

East Northamptonshire Councillors have refused to grant planning permission for a chip shop to open near two schools in Rushden, Northamptonshire.

Planning permission and chip shops

This failure to secure planning permission shows that prohibition or regulation by the state, can be used to lower the supply of a demerit good. The external costs might include litter, obesity. However, the schools could have countered this by not allowing children to leave the premises, actions which would have lowered demand during lunchtime. 

Earlier this year, Jamie Oliver’s campaign for better school food, appeared to run out of steam and government support, but does this issue highlight information failure, and the reluctance of some children to eat a more varied diet. 

Some schools have stopped sales of other demerit goods, crisps, colas, lemonades and chocolate citing health reasons, countered by some enterprising pupils who then smuggled packets and cans for resale at break.

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