Economic Consumers Essay ⋆ Environment Essay Examples ⋆ EssayEmpire

This Economic Consumers Essay example is published for educational and informational purposes only. If you need a custom essay or research paper on this topic, please use our writing services. EssayEmpire.com offers reliable custom essay writing services that can help you to receive high grades and impress your professors with the quality of each essay or research paper you hand in.

The origin of understanding of consumers and consumption derives from the microeconomic frameworks first constructed in the 19th century. This economic viewpoint depends on the concepts of utility and rational thought. It is assumed that the consumer has a finite stock of money that can be spent on a variety of different commodities or products. Since it is possible for individual consumers accurately to place a specific amount of happiness (or utility) on the possession of a unit of each available product and the value of that utility declines if the consumer already has bought some unit of that item-then the consumer will make rational decisions in order to maximize the amount of utility that can be obtained. This model remains influential, although it has undergone a number of refinements over the years.

First, the concept of rationality was challenged on the basis that it demanded high levels of information and that it was clear that this did not reflect reality. In fact, sellers generally know far more about the utility offered by goods than buyers do, and it is difficult to place an accurate value on gaining information. As a result, rationality has been replaced by the concept of bounded rationality, which implies that consumers will accept that seeking to obtain full information about products would be an inefficient process.

A second area of improvement to the understanding of consumers and their behavior was provided by Maslow’s Hierarchy of Needs, which represented a slightly more sophisticated understanding of how consumers choose their products. According to Maslow, consumers will first of all look for the deepest psychological needs (safety, health, food) and, once these needs have been satisfied, the next level represents well-being such as family life, comfort, and purpose. Higher levels of need add self-realization or status. This model of consumer behavior has proved to be quite robust. Intensive research into the psychology and nature of consumers in various sets of circumstances has added to Maslow’s Hierarchy of Needs, which has shown that people can behave differently in the presence of various sets of situational or environmental factors. This understanding has led to a huge increase in the sophistication and efficiency of the retail and service sectors.

The term consumer refers to a person who uses up or destroys some kind of resource. This was not previously considered problematic in an age in which the ability of humanity to dominate nature appeared to be both inevitable and a suitable solution to the growing level of demand within economies. However, as the pressure on the environment continues to increase and the strain becomes evident in terms of environmental degradation, global warming, and the limited levels of fresh water, the need to reform the understanding of the consumer has become more urgent. It is no longer possible to consider as acceptable the individual as a consumer who will participate in the Tragedy of the Commons. Instead, people and institutions are often reinvented as caretakers or husbands of resources, ensuring their sustainable use and development. This has led to conflict with commercial interests who profit by exploiting unsustainable resources and who believe that continued economic growth without constraints is a genuine possibility.

Bibliography:

James G. March and Herbert A. Simon, Organizations (Blackwell Publishers, 1993);
Abraham Harold Maslow, Motivation and Personality (Harper Collins Publishers, 1987);
Michael Silverstein and John Butman, Treasure Hunt: Inside the Mind of the New Consumer (Penguin Group, 2006).