We all know that economics is a social science, which deals with production, distribution and consumption functions. It is all about making choices regarding the allocation of scarce resources, so as to make their best possible use and satisfy human wants and needs. In economics, we often go through the terms needs and wants, but have you wondered about their differences. Needs point out the something you must have for survival.
On the other hand, wants refers to something which is good to have, but not essential for survival. For the purpose of spending and saving money wisely, every person must know the difference between needs and wants.
Content: Needs Vs Wants
|Basis for Comparison||Needs||Wants|
|Meaning||Needs refers to an individual's basic requirement that must be fulfilled, in order to survive.||Wants are described as the goods and services, which an individual like to have, as a part of his caprices.|
|What is it?||Something you must have.||Something you wish to have.|
|Change||May remain constant over time.||May change over time.|
|Non-fulfillment||May result in onset of disease or even death.||May result in disappointment.|
Definition of Needs
By the term needs, we mean those requirements which are extremely necessary for a human being to live a healthy life. They are personal, psychological, cultural, social, etc that are important for an organism to survive.
In ancient times the three basic needs of the man are food, clothing and shelter but with the passage of time, education and healthcare also became integral, as they improve the quality of life. They are a person’s first priority as they are the things, that they keep us healthy and safe. Therefore, if needs are not satisfied in time, it may result in illness, inability in functioning properly or even death.
Definition of Wants
In economics, wants are defined as something that a person would like to possess, either immediately or at a later time. Simply put, wants are the desires that cause business activities to produce such products and services that are demanded by the economy. They are optional, i.e. an individual is going to survive, even if not satisfied. Further, wants may vary from person to person and time to time.
Key Differences Between Needs and Wants
The following points are noteworthy so far as the difference between needs and wants are concerned:
- The term ‘needs’ is defined as an individual’s basic requirement that must be fulfilled, in order to survive. Wants are described as the goods and services, which an individual like to have, as a part of his caprices.
- An individual needs are limited while his wants are unlimited.
- Needs are something that you must have, in order to live. On the contrary, wants are something that you wish to have, so as to add comforts in your life.
- Needs represents the necessities while wants indicate desires.
- Needs are important for the human being to survive. As against this, wants are not as important as needs, because a person can live without wants.
- Needs are those items, that are required for life and does not change with time. As opposed to, wants are those items, that are desired by an individual either right now or in future. Therefore, wants might change over time.
- As needs are essential for life, non-fulfillment may lead to illness or even death. In contrast wants are not essential for living and so non-fulfillment, does not have a great impact on a person’s life, however, disappointment may be there.
Video: Needs Vs Wants
With the above discussion, on these two concepts of economics, it concluded that needs and wants are separate forces, that compels actions for satisfaction. If needs are not met on time, the survival of a person is at stake whereas wants are something which a person is craving for, that does not challenge a person’s survival if not satisfied.
So, needs can be distinguished from wants on the basis of their level of importance. Hence, the distinction is between what is required and what is desired.