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Definition of Needs According to Economists

Edukasistan.com - Hello everyone! Understanding the concept of needs in the economic field is crucial because it is a key element influencing buyer behaviour and market trends. In the economic sphere, needs can be interpreted as desires or needs that individuals or communities must meet to ensure survival and basic needs such as food, clothes, housing, etc.

Leading economists have varying views on the concept of needs in economics. Some assume that need is something natural or inherent in humans, while others argue that social and cultural environmental factors influence needs.

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    However, understanding the concept of needs in economics is vital because it helps us understand consumer behaviour. We can determine the right product or service to market and increase sales volumes by knowing consumer needs.

    In addition, understanding the need concept is also helpful in formulating efficient marketing strategies and increasing the competitiveness of companies in the marketplace. Therefore, we need to study more deeply about the need in the economy to optimize our business potential. In this article, I will comment in depth on a definition of needs in general and the views of leading experts on it.

    • Necessity refers to a condition in which an individual feels the need for something to fulfil essential aspects of his life.
    • Adam Smith, an economist, defines a need as a condition in which an individual feels the need for something to meet essential aspects of his life.
    • According to Alfred Marshall, need is when an individual feels the need for something essential to his life that other goods or services cannot replace.
    • Lionel Robbins states that need is a condition where an individual senses the need for something essential for his or her life, unique and cannot be substituted in the same way by any other good or service.
    • Paul Samuelson and John Maynard Keynes argue that needs are the conditions in which a person senses a need for what is essential to their life, that is unique and not substitutable in the like manner by another good or service, and that such needs can be satisfied through the use of existing resources.

    Definition of Needs in General

    Definition of Needs According to Economists
    Definition of Needs According to Economists

    In general, needs can be understood as essential for individuals or groups to maintain their survival. A wide range of needs can be divided into several categories, including primary needs such as food, clothing, and shelter, as well as tertiary needs like education, recreation, and pleasure.

    For example, food is an essential daily requirement for our health and energy. Clothing also belongs to the category of primary necessities because it protects the body from unpleasant weather or environmental conditions.

    Definition of Needs According to Economists

    To manage resources effectively and meet everyday needs, it is essential to understand the difference between primary, secondary, and tertiary needs.

    Prioritize meeting primary needs such as food, clothing, and housing before considering secondary and tertiary needs. This approach will help make wise decisions about the expenditure and allocation of resources.

    Various economists give different definitions of what a need is. Some argue that a need only covers physical goods, while others assume that a service or experience also falls within the need category.

    Adam Smith, a leading economic figure, defined needs as goods or services that can satisfy human desires and add value. This view of Smith has had a significant influence on economic thinking in his time. What about the other economists' views? Let us keep reading this article until it is done!

    1. Adam Smith

    Adam Smith, an essential figure in economic history who lived in the 18th century, significantly contributed to developing economics as a discipline. It defines needs as goods or services individuals expect to meet daily needs.

    As an illustration of Adam Smith's thinking about needs, he emphasized the importance of food as one of the basic human needs. Smith argued that everyone can find and consume food according to their economic capabilities.

    2. Alfred Marshall

    Alfred Marshall, an English economist who contributed to economic development in the 19th and early 20th centuries, divided needs into two main categories: "primary needs" and "secondary needs".

    According to Marshall, primary needs include essential elements such as food, clothing, housing, health, and education. In contrast, secondary needs cover recreation, entertainment, and advanced education or skills training.

    3. Lionel Robbins

    Lionel Robbins, an English economist who contributed significantly to the theory of value and income distribution, defined needs as unlimited human desires in the face of limited resources.

    For example, Lionel Robbins' perspective on needs is the human desire to have luxury things like luxury cars or big houses, which have to face the reality of limited resources, forcing them to make choices and allocate their resources wisely.

    4. Paul Samuelson

    Paul Samuelson, an economist from the United States known for his contributions to modern economic theory, also divides needs into "primary needs" and "secondary needs".

    According to Samuelson, the primary needs include food, clothing, and housing, while the secondary needs include advanced education or skill training, recreation and entertainment.

    5. John Maynard Keynes

    John Maynard Keynes, an influential British economist in macroeconomics and Keynesian theory, distinguished between "real needs" and "potential desires".

    According to Keynes, actual needs include essential items such as food and clothing, while potential desires include luxury items or things not essential for survival.


    Economists like Adam Smith, Alfred Marshall, Lionel Robbins, Paul Samuelson, and John Maynard Keynes have diverse views on the need concept. Despite this, they all agree that needs affect consumer behaviour and demand in the market.

    For example, Smith considered needs as goods or services individuals desire for everyday life, while Keynes distinguished between "actual needs" and "potential desires."

    In conclusion, economists have different opinions about the definition of needs. Some argue that needs are limited to physical goods, while others extend this definition to include services and experiences.

    Understanding the concept of needs in economics is crucial as it affects consumer behaviour and demand dynamics in the market. By understanding the different needs and views of leading economists, we can take wise steps in managing resources and effectively meeting everyday needs.

    Frequently Asked Questions (FAQs)

    1. How do economists define needs?

    Economists define need as the unlimited desire of man to acquire various goods and services that meet the vital aspects of his life.

    2. What is the difference between needs and wants?

    Necessity is a crucial and essential desire for human survival, while desire is a less essential and non-vital desire for man's survival.

    3. What are the categories of needs in the opinion of economists?

    According to economists, needs are divided into three categories,namely primary needs, which include food, clothing, and housing; secondary needs, which include education, health, and transport; and tertiary needs related to entertainment, holidays, and recreation.

    4. How does it need to influence consumer behaviour?

    Needs influence consumer behaviour because consumers will strive to find goods and services that meet their vital needs.

    5. How does demand affect the market dynamics of supply and demand?

    Needs influence the market dynamics of demand and supply because both aspects are created from human needs. When demand for a good or service increases, demand also increases, and price tends to rise.

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