Factors affecting the demand of households

1. The Tastes of the Household. Every family is different and even members of the same family have different tastes and preferences. In most countries populations are not these days homogeneous, but have been formed from mixed racial groups. This is not always obvious if the country has had a long period of settled history, and intermarriage between different racial groups has occurred. All that left perhaps of originally quite different peoples is a variety of tastes and preferences which have very ancient origins. Superimposed on these ancient patterns of taste are other more modern patterns: religious, social and economic pressures which influence choice in food, clothing, living conditions, entertainment and recreation. These tastes and preferences play some part in deciding the total demand for a commodity or service. We may therefore demand goods because they satisfy innate wants which we cannot explain but still feel are necessary; or because they are fashionable; or because we have been convinced by advertising that they are desirable. The demand for all such goods will be strong, and the demand for goods which are not to our personal taste, or which are less fashionable or less well promoted, will be weaker.

2. The Income of the Household. Family income is often decisive as to whether a commodity is demanded or not. Few ordinary households demand light aircraft as a means of personal transport, but a millionaire may keep one available. Many families run a car, some run two cars, and many are resigned to the fact that they will never be in the car-buying income range. Most heads of families know what their families can afford, and buy within quite narrow price bands. Even so-called impulse buying, where consumers buy a thing because they happen to see it, tends to occur within the price range each householder knows to be appropriate for the family.

3. The Necessity of the Commodity, and its Alternatives. Some goods are demanded by everyone because they are necessities. We all require food, clothing, shelter, etc. Some goods become necessities because they are habit-forming, like tobacco and alcohol. Where a commodity has alternatives it is not a necessity, but the alternative must be in the same price range. Rolls-Royce cars are not substitutes for ready-made garments as far as the majority of consumers are concerned. Their respective purchasers might each regard the item as a necessity, but the alternative in each case is not a necessity, it is not even considered as a substitute for the preferred item.

4. The Price of Other Goods. If the price of a commodity is high compared with the price of other goods the demand for it will be relatively weak, if the goods are close substitutes for one another - as for example, butter and margarine -the price of one will be seriously affected by a reduction in price of its competitor. Even if the goods are not close substitutes for one another, there is usually some competition between them, because the money to be spent represents all the possible alternatives of satisfactions available to the consumer. The young lady who decides against a bottle perfume and to favour of a pair of new shoes has been influenced by the price of the perfume into thinking that the shoes will yield her greater satisfaction. They are not close substitutes for one another but they are still in competition.

(3435)

Notes

1. homogeneous - однородный

2. superimposed on patterns - наложенный на образцы

3. innate wants - врожденные желания

4. price bands - ценовой диапазон

5. impulse buying - срочная покупка

Задание 1. Прочитайте и переведите текст.

Задание 2. Ответьте на следующие вопросы:

1. Why does intermarriage between different racial groups still occur?

2. What influences choice in food, clothing, living, conditions, entertainment and recreation?

3. When does the so-called impulse buying tend to occur?

4. What do they understand under necessities?

TEXT 6