Phantom types are useful for dealing with data, that has identical representations but isn't logically of the same type.

A good example is dealing with currencies. If you work with currencies you absolutely never want to e.g. add two amounts of different currencies. What would the result currency of 5.32€ + 2.94$ be? It's not defined and there is no good reason to do this.

A solution to this could look something like this:

{-# LANGUAGE GeneralizedNewtypeDeriving #-}

data USD
data EUR

newtype Amount a = Amount Double
                 deriving (Show, Eq, Ord, Num)

The GeneralisedNewtypeDeriving extension allows us to derive Num for the Amount type. GHC reuses Double's Num instance.

Now if you represent Euro amounts with e.g. (5.0 :: Amount EUR) you have solved the problem of keeping double amounts separate at the type level without introducing overhead. Stuff like (1.13 :: Amount EUR) + (5.30 :: Amount USD) will result in a type error and require you to deal with currency conversion appropriately.

More comprehensive documentation can be found in the haskell wiki article (opens new window)