VIII) On the basis of satisfaction of wants –
Necessaries comforts luxuries.
CLASSIFICATION OF WANTS –
Human wants foe different goods can be classified on the basis of urgency, satisfaction received or availability of substitutes into necessaries, comforts and luxuries.
1] Necessaries
They are also known as primary wants They are satisfied first. Necessaries are goods without which survival would be impossible or intolerable. They are essential for survival eg food, clothing and shelter essential for survival. Satisfaction received from consumption of necessaries is greater than the money paid for them. Lower income groups spend a large percentage of their income on basic requirements.
Necessaries are further classified into
i) Necessaries of life
Necessaries of life are essential for survival eg food, clothing and shelter essential for survival.
ii) Necessaries of efficiency
Necessaries of efficiency comprise of those goods which increase the productivity of human beings eg tools for a carpenter, a desk and table lamp for a student, etc.
iii) Necessaries of convention
Necessaries of convention include goods which are indispensible for an individual or family because of the pressure of social convention eg.
2] Comforts
They are also known as secondary wants. They are satisfied after satisfaction of primary wants Comforts make life a pleasure and an enjoyable experience eg domestic appliances. Satisfaction received from consumption of necessaries is greater than the money paid for them. Middle income groups spend a large percentage of their income on comforts.
3] Luxuries
They are also known as extravagant or superficial wants. They are satisfied after satisfaction of primary and secondary wants They are not essential for survival. One can lead a perfectly healthy life without consumption of luxuries. Usually they are very expensive and affect the prestige and social position enjoyed by a person, eg jewellery, precious metals and precious stones etc. Satisfaction received from consumption of necessaries is less than the money paid for them. High income groups spend a large percentage of their income on comforts
A closer look at the above classification reveals that the urgency of demand for necessaries is the highest while it is the lowest for luxuries.
Further classification of human wants on the basis of satisfaction received, into necessaries, comforts and luxuries is not rigid. It is relative. It differs from person to person on the basis of the use of the commodity. The same commodity may fall in any one of the three categories as it depends on who the consumer is. For eg a car for a doctor is a basic requirement, for a housewife a comfort and a luxury for a student.