Theory of Consumer Behaviour
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
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
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.
Characteristics of wants
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.
2. 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.
3. 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,