Meaning of Needs

Generally, need refers to any wish or desire, but in economics, not all types of wishes or desires can be called needs. In economics, a wish or desire is called a need when a person has the ability and willingness to fulfill it. 

A need cannot be fulfilled without either of these. For example, Sabin desires to buy a car and is willing to do so, but if he does not have the ability or resources to buy the car, then Bharat's desire cannot be a need. 

If Bharat has the desire, willingness, and ability to buy a car, then that wish or desire can be fulfilled, and it can be called a need. Therefore, the following things are necessary for something to be a need:

(a) Having a desire to obtain a certain item.

(b) Having the qualification or ability to fulfill the desire.

(c) Willingness.

If any of the above elements are absent, it cannot be called a need in economics.

Characteristics of Needs

The characteristics of needs can be mentioned as follows:

(a) Human needs are unlimited: Human needs are never fully satisfied. As soon as one need is fulfilled, another need arises. If that need is also fulfilled, yet another need appears. Therefore, human needs are unlimited.

(b) Some needs can be fulfilled: Although human needs are unlimited, some needs can be fulfilled. Humans can fulfill some needs with their limited resources.

(c) Needs are complementary to each other: To fulfill any need, another item is also involved with that item. For example, a pen needs ink to write. Similarly, vegetables need salt, water, etc. Cars and motorcycles need petrol. Therefore, needs are complementary.

(d) Needs are competitive: Needs are not only complementary to each other but also competitive with each other. Due to limited income, all needs cannot be fulfilled at once. Fulfilling one need requires sacrificing another need. For example, a student has only Rs. 10. They need a pencil, a copy, and a samosa, each costing Rs. 10. Fulfilling the need for one of these items requires sacrificing the need for the other two.

(e) Needs are alternative: If a particular need can be fulfilled in different ways, then that need is considered alternative. For example, a hungry person can satisfy their hunger by choosing one of the alternatives like bread, rice, momo, or chow mein. Which alternative to choose mainly depends on the price of the item and the consumer's income.

(f) Needs vary according to place, time, and person: The needs of every person are not the same. Needs vary according to place, time, and person. People living in cold places need thicker and warmer clothes, while people living in hot places need thinner cotton clothes. Similarly, needs also differ according to a person's individual nature and interests.

(g) Needs change into habits: If a certain need is regularly satisfied or fulfilled, it turns into a habit. For example, if a young man regularly desires to smoke cigarettes and his desire is fulfilled, then his need for cigarettes turns into a habit.

(h) Needs are also created by advertising, fashion, and habits: Some human needs are also created by advertising, fashion, and habits. For example, due to the advertisement of Fair & Lovely cream, many young women consider this cream necessary for themselves, and the cream becomes their need. The use of the cream can also be established as fashion and habit.

(i) Present needs are more important than future needs: Human nature is to give more importance to today's needs than tomorrow's needs. When it is difficult to make ends meet today, it is not considered good to save for tomorrow. The future is uncertain and unpredictable. Therefore, today's needs are more important than tomorrow's needs.

Classification of Needs

Needs are not the same. Their importance depends on human requirements.

Based on this, needs are classified into three categories:

(a) Essential Needs: The need for goods that are necessary for daily life is considered an essential need. In the absence of this, it is difficult to manage daily life. Examples include food, shelter, clothing, education, health, security, etc. Essential needs are also divided into three categories:

1. Needs Related to Survival: The goods that are indispensable for maintaining daily life are called needs related to survival, for example, food, clothing, medicine, and housing.
2. Needs Related to Work Efficiency: Essential goods that enhance work efficiency and help strengthen a person's profession. For example, markers and dusters for teachers, surgical equipment for doctors, etc. Similarly, while people can survive on basic food, they need a balanced diet, such as milk, yogurt, fish, meat, fruits, etc., to work efficiently.
3. Needs Related to Enhancing Prestige: Since humans are social beings, they have to follow customs and traditions. Following them becomes a matter of social prestige. For example, the need for goods required to conduct marriages, festivals, etc., can be placed under this category.

(b) Comfort Needs: Goods that are not particularly necessary for survival but increase comfort and convenience are called comfort needs. Examples include heaters in winter, fans in summer, cars, motorcycles, etc. These needs sometimes increase people's work efficiency. A motorcycle can be a necessity for increasing efficiency rather than a luxury for a teacher.

(c) Luxury Needs: The need for goods from whose use a person experiences extreme comfort and convenience is considered a luxury need. Examples include refrigerators, gold and diamond jewelry, expensive cars, etc. The need for such goods reduces rather than increases people's work efficiency or makes them lazy. The need for these goods leads people towards indulgence. Since a lot of money has to be spent to fulfill these needs, they are considered undesirable from the perspective of social welfare.

Desire in Economics

In simple terms, a desire refers to a longing or craving for something that goes beyond mere survival. Unlike needs, which are essential for basic survival and well-being, desires are often associated with things that enhance one’s lifestyle or bring personal satisfaction. 

Desires can be limitless, shaped by personal preferences, societal influences, and cultural factors.

In economic theory, desire is often tied to consumer behavior, as individuals make choices to satisfy their wants, despite the scarcity of resources. 

While desires are not mandatory for survival, they play a significant role in influencing demand in the market. The desire for goods and services fuels consumption, which drives economic growth and shapes market trends.

The Nature of Desire

Unlike needs, desires are not constrained by basic life-sustaining requirements. Instead, they reflect individual preferences that extend beyond what is necessary. 

Desires include items such as luxury goods, entertainment, and services that provide comfort or prestige, but they are not essential for basic functioning. People’s desires vary greatly, influenced by factors such as culture, economic status, social influence, and personal interests.

While desires can often be fulfilling and contribute to overall well-being, they are not the same as needs. A person may desire a high-end car or a vacation abroad, but these are not required for survival or basic functioning.

Major Differences Between Needs and Desires

To better understand the distinction between needs and desires in economics, here is a detailed comparison between needs and desires: