Economics

Importance And Classification Of Human Wants In Economics

Prof. Herman classified human wants into twelve types. They are : 1) Absolute and relative wants, 2) Urgent wants and wants that can be postponed, 3) Positive wants and Negative wants, 4) Direct wants and indirect wants. 5) General wants and particular wants, 6) Recurring wants and permanent wants, 7) Temporary wants and fixed wants, 8) Ordinary wants and extra-ordinary wants, 9) Present wants and future wants, 10) Individual wants and collective wants, 11) Private wants and 12) public wants.

Classification Of Human Wants In Economics

Herman’s classification of wants is highly extensive. Normally Economists classify wants into three types. They are : 1) Necessaries, 2) Comforts and 3) Luxuries.

1. Necessaries: The goods which are essential for human life are called as necessaries. They can again be divided into three kinds. They are a) Necessaries of life, b) Necessaries of efficiency, c) Conventional efficiency.

a) Necessaries of life : Man cannot live without. necessary goods like food, clothing and shelter. These are basic wants.

b) Necessaries of efficiency : The goods which improve our efficiency are known as necessaries of efficiency. They are not necessary for human life, but they increase our efficiency. For example better food, good house etc.

c) Conventional necessaries : Goods which are consumed due to social custom or habits are called conventional necessaries. For example school uniform, expenditure on alcohol, tobacco, opium etc.

2. Comforts : Goods which make our life comfortable are called comforts. They give pleasure and happiness. They are not necessaries. Example : Scooter, fan, table etc.

3. Luxuries : The goods which satisfy superfluous wants of a person are called luxuries. Man can lead life without these goods. They do not increase the efficiency. They are unnecessary. They may increase status and prestige in society. For example diamonds, air conditioners, refrigerators, video cassette players etc. Luxuries are of two types : a) Harmful luxuries and b) Harmless luxuries. Harmful luxuries are injurious to health, alcohol, opium etc. T.V.. Refrigerators, jewels etc. are harmless luxuries.

The classification of wants into necessaries, comforts and luxuries is not final and rigid, They are relative tems. They differ from person to person, place to place and from time to time. A goods may be a necessary for one person. But it may become a luxury to another man. e.g. a car is a necessary goods for a doctor, where as it is a luxury for a student. Similarly a luxury good may become comfort or even necessary after sometime. e.g. Radio, watch etc. In the same manner what is necessary goods in one place may become luxury in another place.

Hence the classification of wants into three kinds is very vague. Wants are relative to person, time and place. But their classification helps us to determine the standard of living. The standard of living will be calculated by per capita income. If the person spends large amount of his income on comforts and luxuries, his standard of living is said to be high.

Importance of Human Wants in Economics:

Human wants are the beginning point for studying Economics. Indeed they are the main basis of all economic activities in a society. The study of Economics does not arise when individuals have no wants. When individuals have no wants, the demand for goods and services does not arise. Consequently production and supply of goods and services do not take place. Hence wants are the basis of all economic activities in society. The demand and supply of different goods depend on the nature of man wants. Similarly standard of living, level of employment and investment also depend on the extent of human wants. Economic activities like consumption, production, distribution and exchange of goods and services are influenced and determined by human wants. Hence human wants have pedal significance in Economics.

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