Needs vs Wants

We know that economics is a social science that deals with the production, distribution and consumption of goods and services. At its heart, it is about how economic resources are allocated appropriately to satisfy human needs and wants. These terms ‘needs’ and ‘wants’ are used in many economic contexts, but have you considered the differences between them?

If you’ve ever struggled to distinguish between the two, you’re not alone. Sometimes we want something so intensely that it feels like a need. Similarly, we may actually need something that we have dismissed as a want. In psychology, wants and needs can both be generally understood as psychological factors that drive human behaviour.

Definition of needs

By the term ‘needs’, it refers to essential conditions, the most basic for a human being to live a safe and healthy life. They are a person’s first priority because if these needs are not fulfilled in a timely manner, the lack of these necessities can lead to illness, impaired functioning, or even death.

According to Abraham Maslow’s Hierarchy of Needs, Needs are divided into five categories, and they are arranged in a hierarchy from the most basic to the most advanced needs:

• Physiological

• Safety

• Love

• Belonging

• Esteem

• Self-actualization

As per Maslow’s theory, the most basic needs must be met before moving on to higher levels of needs.

Definition of wants

Wants, on the other hand, are defined as desires that go beyond the basic necessities. something that a person desires to have, either immediately or at some point in the future. Unlike needs, wants are not essential for survival but are often pursued to enhance comfort, enjoyment, or status.  

Differences between Needs and Wants

The primary difference between needs and wants lies in the fact that needs are considered to be essential to our survival, while wants are thought to be superfluous, a bonus. Others suggest that one way to distinguish between both is to consider whether or not its absence would cause harm. For instance, if one’s house is taken away, it would cause the person harm, whereas if some pieces of art are taken away, they would not.

The difference between basic needs – food, water, shelter and wants is obvious. However, when people have their needs beyond the basics, like a comfortable chair, a computer or a car, the distinctive line starts to get blurry.

References

Erin, G 2024, What Is the Difference Between Needs and Wants?, Investopedia, available at <https://www.investopedia.com/difference-between-needs-and-wants-8612333>.

Kelsey, S n.d., Needs and Wants: Definition, Difference, & Examples, Berkeley Wellbeing, available at <https://www.berkeleywellbeing.com/needs-and-wants.html>.

Key Differences n.d., Difference Between Needs and Wants, Key Differences, available at <https://keydifferences.com/difference-between-needs-and-wants.html>.

McGregor, J. A, Camfield, L, & Woodcock, A 2009), Needs, wants and goals: Wellbeing, quality of life and public policy, Applied research in Quality of Life, 4, 135-154.