The Hindu Business Line : Rational consumer

The article “Complex dynamics of consumers’ choice” (Business Line, February 8) has remarked that a consumer “consults as many buyers and users as possible on their experiences to arrive at a considered judgment and then makes the purchase”. The observation is, no doubt, true. But then it depends upon the goods, which (in economics) could be classified as necessaries, comforts and luxuries.

Necessary goods such as rice, wheat, pulses, and so on, involve recurring purchases (say, every month) and the consumer would not change the variety/brand he normally prefers to consume. Since the amount he spends on those goods (in his monthly budget) is sizable, he would spend the wherewithal without making much enquiries about their quality, prices, etc.

As far as comforts and luxuries (which are, of course, relative terms) are concerned, the consumer would be greatly influenced by “demonstration effect” (copying the acts of others), illusion (thinking that high prices mean good quality) and status symbol (demanding a car/motorcycle).

A rational consumer then uses his limited resources on the purchase of such commodities (be they necessaries, comforts or luxuries) to get maximum satisfaction, which, of course, is a subjective phenomenon.

S. Ramakrishnasayee Ranipet (TN)

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