We explain what consumer goods are and their relationship with capital goods. Also, what types exist and their characteristics.
What are consumer goods?
In economics, consumer goods are goods or services with which a human need can be immediately satisfied whether durable (like a house to live in) or non-durable (like food to eat). They should not be confused with the capital goods that are used in the production process.
Consumer goods are an essential part of the economic chain. They are produced and marketed so that people can satisfy fundamental needs such as hunger, thirst, sleep, protection of environmental elements, among many others. For this reason they are normally considered property. finalsthat is, that appear in the last stage of the production circuit.
Thus, for example, when a consumer goes to the supermarket and buys the food they will need for dinner, they are purchasing goods ready to be consumed and satisfy their family's need to sustain themselves.
See also: Goods
Types of consumer goods
There are several ways to classify consumer goods, depending on criteria such as their durability, their degree of completion or their usual consumption dynamics.
Depending on their durability, they can be:
- Durable or durable consumer goods. They are those that do not exhaust themselves when consumed, that is, they have a long-lasting existence and can satisfy a need constantly. For example: a home, a car, a kitchen or a piece of land.
- Ephemeral or non-durable consumer goods. They are those that after being consumed (or after a period of production) are exhausted or lose their immediate usefulness, so they must be replaced with new ones in a short period of time. For example: food and drinks, medicines, fuel or drinking water.
Depending on its degree of completion, we can differentiate between:
- Final consumer goods. They are those that are at the end of the production chain, that is, they are used to be consumed and not to build other types of goods. For example: candy, clothing or cell phones.
- Intermediate consumer goods. They are those that, although they have completed their productive circuit, are destined to be part of the productive chains of other goods, that is, they serve to produce other goods. For example: plastic packaging, screws, cables or transistors.
Depending on its consumption dynamics, we can speak of:
- Substitute consumer goods. They are those that are consumed instead of other similar goods, that is, they compete with others in the same industry and therefore one or the other is purchased. For example: margarine and butter, sugar and sweetener, gasoline and diesel, or two different presentations of bread.
- Complementary consumer goods. They are those that are consumed together with other similar goods, since both are required to satisfy a need. Instead of competing, as in the case of substitutes, these types of goods complement each other. For example: a vehicle and its fuel, coffee and sugar to sweeten it, a printer and its ink cartridges, or an appliance and the electricity it needs to function.
Consumer goods and capital goods
Unlike consumer goods, produced and marketed so that people can use them, capital goods (also called production or equipment goods) are those that are needed to advance in the production circuit of some merchandise. That is to say, are those goods and services essential for production to occur.
Like consumer goods, capital goods can be more or less durable, since they undergo a process of wear or consumption when they are used. Some examples of capital goods are: machinery, tools, electricity, means of transportation, raw materials and any good that is used in the production of other types of goods.
Continue with: Intermediate goods
References
- Cibotti, R and Paz, P. (1966). Introduction to development planning. Latin American Institute of Economic and Social Planning.
- National Institute of Statistics and Censuses (INDEC) of the Argentine Republic. Glossary. Indec
- The Encyclopaedia Britannica. “Consumer good”. Britannica
