The existence of human wants is the basis of all economic activity in a society. All desires, tastes and motives of human beings are called wants in economics.
1. Wants may arise due to elementary and psychological causes. The wants for food, clothing and housing are elementary and psychological.
2. Wants may arise due to social causes. As members of society, we may require a particular type of dress and food.
3. Wants arise due to customs and habits like drinking tea and chewing.
4. Wants may arise due to advertisements.
In the early stages of civilisation, wants of men were few and simple. With advancement of civilisation, wants have become unlimited and also complex. Man tries to satisfy most of his wants through economic activity. Since the resources are limited, he has to choose between urgent wants and not so urgent wants. A systematic survey of this process is called consumption. Consumption means using up of goods and services in the satisfaction of human wants. The economics of consumption is related to a study of nature of wants and the behaviour of demand.
1. Wants are unlimited: Man is a bundle of desires. There is no limit to human wants. If one set of wants are fulfilled, immediately another set of wants would be felt. Even the richest man will have a list of wants to be fulfilled.
Every want is satiable: wants in general are unlimited. But a single or a particular want is satiable. We can completely satisfy a single want. A man is hungry and he requires food. By spending some money on food, he can get food and satisfy his hunger.
1. Wants are competitive: Wants are unlimited. The resources and time at our disposal are much limited and we cannot satisfy all wants. So the wants will be competing to get satisfied. One set of wants may be competing with other set of wants to get preference of choosing first. For example, Raju has a sum of Rs.20. With this amount of Rs.20, he has to choose between going to a movie, buying a magazine or buying vegetables. Of course, a consumer will choose the more urgent wants and distribute his income on several goods in such a manner as to get maximum satisfaction.
2. Wants are complementary: Some wants are complementary in nature, i.e. they have to be satisfied together. Though the want may be a single one, we require many commodities and services to satisfy that want. Want for 'writing' includes want for paper, pen and ink. In some cases, wants may be both 'competitive' and 'complementary'. For example, labour and machinery. Labour can be displaced by machinery. Machines cannot work without the help of labour.
3. Wants are alternative: A want can be satisfied by two or more goods or by two or more methods. A want for hot drink may be satisfied by coffee or tea. We may go by 'bus' or 'train' or by 'taxi' to reach our destination. Thus, a want can be satisfied by many ways. These alternative goods or methods are called 'substitutes'.
Wants vary with time, place and person: Wants are not static in character. They are changing with time, place and person. We require hot drinks in winter and cool drinks in summer. People of England require warm woollen suits and rain coats. People of India require only cotton. The wants of a villager in Andhra Pradesh are different from a business magnet living in Bombay. The wants of our forefathers were different from the wants of the present generation. So, wants vary with generation, culture, society, geographic location and the extent of economic development.
1. Some wants recur again: Some wants are felt again and again. The want for food can be satisfied by eating food. Again the same want appear after a few hours. That is why we say wants are recurring in nature.
2. Wants are influenced by advertisements: Effective advertisements through films, journals, radio and TV will create new wants and the existing wants get modified. Through advertisements and clever salesmanship, businessmen create tastes for their products.
3. Wants become habits and customs: If a particular want is satisfied repeatedly by a commodity, then it becomes a habit. Example: drinking coffee and tea. Wants become habits and habits are responsible for wants.