Necessity vs. Commodity: What's the Difference?
Edited by Janet White || By Harlon Moss || Updated on November 7, 2023
Necessity refers to something essential for survival or fundamental needs, whereas a commodity is a raw material or product that can be bought and sold.
Key Differences
A necessity is something that is essential and unavoidable for living, such as food, water, and shelter. Commodities, on the other hand, encompass a broader range of items that can include necessities but also non-essential goods that are produced, traded, and consumed.
Commodities are often associated with trade and economics and can include basic goods like grain, metals, and oil, as well as finished products. Necessities, however, are generally not subject to the same market volatility as commodities, as their demand tends to be consistent due to their essential nature.
While necessities are crucial for maintaining life and basic well-being, commodities are not always essential and can be subject to market speculation. For instance, wheat is a commodity that is also a necessity, but gold, another commodity, is not a necessity.
The concept of necessity can vary based on individual circumstances and cultural contexts, but it typically relates to basic human needs. Commodities, however, are universally recognized in the context of economic markets and are often subject to global price changes.
Necessities usually have inelastic demand, meaning their consumption doesn’t change much with price fluctuations, while commodities can have elastic demand, with consumption heavily influenced by market prices and availability.
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Comparison Chart
Definition
Essential for survival or basic needs
Tradable item or raw material
Demand
Inelastic, consistently needed
Can be elastic, subject to market forces
Essentiality
Always essential
Can be non-essential
Market Influence
Less subject to market change
Subject to market speculation and changes
Example
Water, food, shelter
Gold, oil, coffee beans
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Necessity and Commodity Definitions
Necessity
A fundamental need that must be met.
Health care is a necessity that should be accessible to all.
Commodity
An item of trade or commerce, especially a raw or agricultural product.
Coffee is a valuable commodity in the global market.
Necessity
An indispensable item or condition.
Electricity has become a necessity in the modern world.
Commodity
A basic good used in commerce that is interchangeable with other goods of the same type.
Oil is a commodity that powers industries worldwide.
Necessity
An unavoidable requirement or need.
In the desert, shade is not a luxury but a necessity.
Commodity
A product that is bought and sold in an economic market.
Wheat is a commodity subject to price changes based on harvests.
Necessity
Something essential for basic survival.
Clean water is a necessity for life.
Commodity
A tangible item that is produced for exchange.
Smartphones have become a widely used commodity.
Necessity
Something that cannot be done without.
A good internet connection is a necessity for remote work.
Commodity
Something of use, advantage, or value.
Time is a precious commodity for a busy professional.
Necessity
The condition or quality of being necessary.
Commodity
Something useful that can be turned to commercial or other advantage
"Left-handed, power-hitting third basemen are a rare commodity in the big leagues" (Steve Guiremand).
Necessity
Something necessary
The necessities of life include food, clothing, and shelter.
Commodity
A product or service that is indistinguishable from ones manufactured or provided by competing companies and that therefore sells primarily on the basis of price rather than quality or style.
FAQs
Is internet access considered a necessity or a commodity?
Internet access is often seen as a necessity in the modern world, but it is also traded as a commodity.
Can a commodity also be a necessity?
Yes, some commodities like food and water are also necessities.
Can the definition of necessity change over time?
Yes, what is considered a necessity can evolve with society and technology.
What defines a necessity?
A necessity is defined as something essential for survival or basic functioning.
Why are commodities important in the global economy?
Commodities are the building blocks of the global economy, crucial for trade and manufacturing.
What role do commodities play in the stock market?
Commodities are traded on the stock market as futures contracts for profit and investment diversification.
What impact do natural disasters have on commodities and necessities?
Natural disasters can disrupt supply chains, affecting the availability and price of both commodities and necessities.
What is a commodity in economic terms?
Economically, a commodity is a basic good interchangeable with other similar goods.
What is considered the most basic necessity?
Basic needs like food, water, and shelter are considered the most fundamental necessities.
Are all commodities physical items?
Most commodities are physical, but some, like bandwidth, can be intangible.
How does scarcity affect commodities and necessities?
Scarcity can increase the value of commodities and make accessing necessities more challenging.
How does demand for necessities differ from commodities?
Demand for necessities remains constant, while demand for commodities can fluctuate with the market.
How are commodity prices determined?
Commodity prices are determined by supply and demand dynamics in the global market.
How does technology affect commodities?
Technology can increase the efficiency of commodity production and change market dynamics.
Is education a necessity or a commodity?
Education is widely considered a necessity, but it is also commercialized as a commodity in some contexts.
Can a luxury ever become a necessity?
Over time, what was once a luxury can become a necessity as society and lifestyles change.
Do all countries have the same necessities?
Essential needs are similar, but cultural and geographic differences can affect what is considered a necessity.
Can commodities be services instead of goods?
Yes, services like electricity and waste disposal are also considered commodities.
Are necessities always affordable?
Not always; even necessities can become expensive due to scarcity or high demand.
Why is water considered both a commodity and a necessity?
Water is a commodity because it is traded and managed, but it is also a necessity for human survival.
About Author
Written by
Harlon MossHarlon is a seasoned quality moderator and accomplished content writer for Difference Wiki. An alumnus of the prestigious University of California, he earned his degree in Computer Science. Leveraging his academic background, Harlon brings a meticulous and informed perspective to his work, ensuring content accuracy and excellence.
Edited by
Janet WhiteJanet White has been an esteemed writer and blogger for Difference Wiki. Holding a Master's degree in Science and Medical Journalism from the prestigious Boston University, she has consistently demonstrated her expertise and passion for her field. When she's not immersed in her work, Janet relishes her time exercising, delving into a good book, and cherishing moments with friends and family.
