Why are merit goods underprovided?

Merit goods are often underprovided because they are characterized by positive externalities, leading to benefits that extend beyond individual consumers to society as a whole. This creates a market failure, as individuals may undervalue the benefits of these goods and, therefore, choose to consume less than the socially optimal level. Additionally, merit goods often require government intervention, such as subsidies or provision, because private markets may not supply them adequately due to their perceived lack of profitability. Consequently, the underprovision of merit goods can result in societal welfare being lower than it could be.