Friday, 9 January 2015

Definition & classification of Wants, Needs, Comforts and Luxuries

Human beings have many desires. They can desire for the ownership of a good house, a car, luxurious furnitures and clothes and huge bank balances. But having a desire is different from the capacity of satisfying the desire. Here comes the difference between desires and wants.

Definition of Wants
Wants can be defined as those desires that are backed by the purchasing capacity of the people.
Desires can be satisfied when you have the purchasing power in terms of money or kind. So, wants are different from desires.

Even though you can not satisfy all desires, your purchasing capacity can convert a desire into a want. Consumers' actions are motivated by the desire or instinct to satisfy their wants and needs and the requirements to choose among different wants and needs.

In Economics, this activity of satisfying needs or wants governs the various business activities and business decisions of producers and manufacturers of goods. Markets also interact accordingly and they are completely controlled by these changing needs and wants of people.

Consumers act according to the urgency of wants. Most urgent wants are satisfied first, then lesser emergency wants are satisfied and lastly, superfluous wants are satisfied.

Let us briefly have a look at these economic terms of wants and needs.

Basically, all requirements of people are broadly classified into needs and wants.

Needs are those without which one can not survive. For example: food, clothes and shelter. These are the most basic requirements for anyone to survive. One may manage himself for one or two days without them. But ultimately, he needs these items to survive. So these items are called as needs.

Wants contain a wider choice of requirements made by human beings to satisfy their desires. Wants can include needs also. But needs can not include wants. You can survive without having or satisfying most of these wants desired by you. For example, a costly food, a bicycle or bike, a movie or TV set, mobile, etc. All these are wants. But they can not be needs. You can still survive without these items.

Now coming to another specific and more deep classification of human wants in economics (or desires), there are three types of wants in economics. They are classified as necessities comforts and luxuries.

Necessities or Necessaries
Necessaries are just like needs. You can't live without satisfying these necessities. Food is necessary to survive. Water is also very necessary for living. Similarly you need air to breathe and survive. So all these are known as necessities because you can't survive without them.

A comfort is something which gives you relief. A fan gives you comfort in breathing the air. An extra side dish of food gives you comfort in eating your food more enjoyingly. A bicycle provides you relief in travelling. All these items can be treated as comforts. They are not necessities as you can live without them. They are needed only to aid for your living conditions.

Luxuries are those which are even more superfluous than comforts. They provide you too much more comfort in your life and are very costly and are of very high standard lifestyle. A luxurious bungalow or a stay in five star hotel, very costly food with many varieties of dishes, a high definition LED TV, Air conditioner, Aeroplane travel, etc. all these can be examples of luxuries. These items give you a very superior standard of living which is not at all necessary under ordinary circumstances for your survival. So these are termed as luxuries.

Needs and Wants change according to circumstances
The above explanations of necessities comforts and luxuries are a view generally accepted by all economists under normal circumstances. But what is regarded as comfort or luxury may be at times considered as necessity under certain different circumstances.

For example, if you are burning with heat at a temperature of 50 degree celsius, then a cool breeze from an air conditioner can be of much need for you to survive yourself. So, in this case, the air conditioner may become a necessity for you.

So, comforts and luxuries can sometimes become necessities under specific circumstances.

With advancement of technology and changing habits of civilisation, this classification of human wants may also undergo variations. Many items of comforts and luxuries may tend to be regarded as necessities nowadays. A mobile phone, colour TV, coolers and even ACs have become normal lifestyles nowadays at every home. They became a part of necessities for most people.

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